Last year, the U.S. Postal Service lost over $5 billion on operating revenue of $65.7 billion for fiscal year 2011. The USPS needed about $70 billion or so for expenses and officials warn that the agency could run out of cash completely by the end of FY 2012. How the hell do you have a near monopoly and run the business into the ditch that badly? I wish I knew. Probably having a business model that relies on the oldest mode of transportation known to man, the feet, where small, cheap items are delivered, by hand, six days a week to over 100 million different locations is a logistical bitch and an enormous drag on resources. And I’m sure the $5 billion plus retiree health care pre-funding and other human capital related liabilities don’t help matters.
Yes, it would appear that the USPS is terminally screwed. Unfortunately, old timey mail is still kind of a necessity. How else will registered mail travel to deadbeats and miscreants? Like anyone will click on a received receipt on an e-mail if they’re being sued for back child support, again. The good news is that the business is fixable. The bad news is that it’s going to be an ugly, bloody process.
Check Your Package
Shipping and package services contribute a little better than $10 billion to the Post Office’s annual revenue. Sell that concession to FedEx or UPS. Make ‘em bid on it. Keep the USPS branding. They would just be using UPS or FDX as the mule. They’re gonna be in the neighborhood anyway, right? Think about all of the enormous transportation overhead. Gone. Instantly. All processing, tracking, anything logistical (that the two private companies excel at), farm it out. Are people going to lose their jobs? Sure they are. But we’re talking about the survival of an American institution that was founded by Ben Franklin: the father of true, American enterprise. The free marketeers will touch themselves like Natalie Portman in “Black Swan”. The non-freemarketeers or whatever the hell they’re called will stroke out. Fine. Fox and MSNBC always need content.
Aye…Robot
The rest of the USPS $60 billion+ in revenue comes from regular, first class mail, periodicals, and the crap known as direct mail advertising. Keep that business. It can be a money maker. Automate it even more than it is now. I mean REALLY automate it. Even more robots in the sorting process. Even experiment with automation in the mail delivery process. Google has been developing driverless cars (and for the life of me it mystifies and scares the shit out of me. I mean, why the hell does a search engine/media company need to get into the driverless car business?). I’m sure they’d JV with the USPS. Imagine. Electric, robot mail trucks rolling through your cul de sac. Will there be casualties? Of course. But the human factor is, unfortunately, part of the problem. So reigning it in is part of the solution.
And there’s another solution. Instead of dumping $5 billion into retiree health care prepayment (c’mon…that’s putting money up a goat’s ass. Have you seen the kinda shape some of the people who work at the post office are in?), quasi privatize the USPS and take a $5 billion equity stake in the business. Would the pride of ownership alter the attitude of the lady behind the counter at the post office in the mall that stays open till 10pm on April 15th? Good question. The guys in the brown uniforms seem to get the job done efficiently. I’d bet they’ve got UPS shares in their 401(k).
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