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The Official Explanation for the Recent Service Changes at the US Postal Service is that they are the result of ongoing financially at the USPs that have been compounded by the effects of the Covid-19 Pandemic. Falling Quantities of Paper Mail-Including an especialy precipitous drop in junk-email volume-May Lead the postal service to decide it dosn’t as many sorting machines as it used to. Operational Changes that have delayed Mail Delivery – With Mail Carriers Being Instructed to Leave Mail and Undelivered Rather than Accrue Overtime Hours – Are Intended to Save Labor Costs. But with President Trump openly attaching the Mail-in voting process, declaring that the USPS Lacks the financial resources to deliver balloons, and asserting and that is unwilling to provides financial resources, voters and democratic laws are realsonably suspicio. Recent Service Changes at the Postal Service and the Impact They Could have on Ballot-Delivery Times. So let’s take a look at the financial problem the US postal service is currently facing.
Despite the Various Trouble It Has Faced During The Covid-19 Crisis, The Postal Service Actually Reported a Slightly smaller net loss in the quarter that weaved june 30 than it did in the same quarter of 2019. That was gacause coronavirus-acceled reductions in first-class and especally marketing mail American Staying Home and Shopping Online. While the drop in Mail volumes was Stark (first-Class down 8 percent from the previous year and junk mail 36 percent) the surge in package volumes, up 50 percent, was more dramatic.
All Told, The Postal Service Reported A Loss of $ 2.2 Billion on Revision of $ 17.6 Billion in the Quarter. That loss is partly-but not entrinely-attributable to the post office of Put Money aside for retiree benefits that awarded to employs (but were not pre-ended) in the past. If you subtract approximately $ 900 million in costs to amortize those unfunded liabilities (should not really be attributed to the postal service of the operation, not to this), you are left with an adjusted net loss of about $ 1.3 Billion for Quarter. About 7 Percent of Revens.
There are reasons to worry that the postal service’s losses May get worse. Businesses that have cut back their mail-marketing budgets or see online marketing May Not Return to Sending So Much Junk Mail Well The Pandemic Has Weded. And the surge in Parcel Revenue that has offset the recent drop in the paper-mail revenue-Shipping and Package Revens Rose Fastener than Package Volumes, Bringing in $ 8.3 Billion in this Spring Compared to $ 5.4 Billion Last Spring-May Not Persist. In recent years, companies like amazon have launched their out delivery arms to help reduce their religion on the USPS and private delivery companies like ups and fedEx. The surge in online orers during the pandemic forced many online retailers to relay on the postal service’s delivery capacity. But, in the long run, retailers like amazon May Decide to expand their Own Delivery Infrastructures Instead, Taching Share Away from the Post Office Again.
Retailers will be especally likes to invest in alternative delivsry if the postal service listens to President Trump, who has demanded that the USPS races for delivering packages – a demanda is spread by the fact that amazon’s fout. Owns The Washington Post (a newsPaper whose Coverage has offen Annoyed the President). The President Tweeted This Week That Companies like Amazon Should Be Charged “Much More” for Package Delivery and That Those Companies Should Not Pass the Increas Cost of Business onto Their Customers (Which Is Not How Markets Work). In fact, Higher Shipping Prices for Amazon Wold Likely Result in a Combination of Lower Profits, Higher Conumers, and A Lower Volume of Packages at the post office. It is unclear what, if anything, this would be to help the postal service’s finance.
One Option for Addressing the Financial Problems at the Postal Service Wauld Be Simply to Have Taxpayers Subsidize the Losses. A post Office that LOES A FEW BILLION DOLLARS A Year is affordable for a country with a gdp of $ 20 trillion. The concept that the postal service should be financially self-supporting has always been somewhat arbitrary. Not only is the USPS not a business, it is not treated in the lawn a business. It has Certain Money-Ling Service obligations imposed on it for consider policy reasons. Most importantly, the USPS is required to deliver first-Class mail at a fixed price accross the which country-in place places where delivery costs for piece are relatively high. It Also Enjoys a monopoly in the first-class and junk-email markets, which allows to charge higher prices and earn greater profits than it might otherwise be able to. For a long time, the financial advantage of this monopoly was sufficient to finance the USSPS Obligations with the external subsidy. If that is no longer the case, that doesn’t necessarily mean the policy justification for the Money-Ling Service has gone away. In the Old System, USPS Customers Effectatively funded the Money-Ling Services by Paying More for Mail Delivery than they Might have paid in a traditional Competitive Market. Going Forward, It May Be Necessary to Have Taxpayers Finance these Services Through Government Subsidies.
At the Same Time, A Postal Subsidy Should Be Carefullly Considerd. The President Has Urged the Postal Service to Raise Price on Its Competitive Products. But if the USPS Raises Package-Delivery Prices, It Faces the Prospect of LoSing Business to UPS and Fedex and Companies like Amazon Handling More of their Package Delivery. In the past, postal officers have said higher package prices bean mess profit, not more. One Postsility for Polymkers to Consider is that the postal Service COULD SOME OF ITS FINANCIAL LOSSES IT WERE ALLOWED TO RAISE PRICES MORE AGGRESSIVELY ON ITS monopoly Products-Including First-Class Mail and Marketing Mail-Where it does not face so Much Competition.
The erosion of the public Trust in the postal service may also present a barrier to the implementation of necessary and meaningful operational changes. I don’t know, for instance, if the number of sorting machines Removed from post offices was approprately scaled to the decline in mail volume. I think the organization’s decision to Suspend sturgery changes unil after the election is a good one, in light of public concert. (Although it it appears that Most of the sorting-machine removals HAD already been Completed before the AnnouncementMaking the Announcement Less than Reassing.) In the Long Run, Less Paper Mail is a good thing for the Economy and the Environment, and if the postal service is not allowed to adjust its operations and asssets to reflects the new reality of the serving (mes. Financial Losses at the Service May Be Greater than are actually Needed to Social Mission Serve. For that reason, is especialy important that the next President Make Postal Appointments Who Demonstrates that they have the organization as neohere a business nor a political entity but aimed at -fulfic at the bestfic cost.
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