In Defense Of The Post Office

Author Tony De Maio

The following excerpt from an article caught my attention.

“The Government Accountability Office recently estimated the U.S. Postal Service faces ‘daunting financial losses‘ of over $238 billion over the next 10 years.“Following the USPS’ first-quarter loss of $297 million, the GAO issued its study, urging Congress to form a panel and start demanding more USPS cutbacks. ‘If no action is taken,’ the GAO report warns, ‘the risk of USPS’s insolvency and the need for a bailout by taxpayers and the U.S. Treasury increases‘.”

It is quite clear to me that the GAO is totally and embarrassingly unfamiliar with the problems the Unites States Postal Service is facing. Perhaps the following will assist in educating them.

Playing Post Office

(Post All Rates)

I note with some concern that the post office is raising rates—again. Hell, it’s only two cents more to forty-one cents. Lessee, now—three cents divided by 41 cents is a little more than 7%. Dat ain’t bad at all. So wot if they raised it over 5% just last year. So wot if inflation is only two percent—I mean, after all, like, those guys gotta live too.

I recomember back in 1955, my mother sent me to the post office on my bicycle for a “large book of threes”. Now, I was fourteen or so and had no idea what she wanted and said so. Being a good Italian mother, she screamed, “Just remember those words—a large book of threes. He’ll know what you want.”

I rode to the post office muttering “a large book of threes” over and over. Upon arriving, I walked up to the window (no lines then) and said, “May I please have a large book of threes.” (Fourteen year olds acted differently back then.) The postmaster handed me a rather small booklet of three-cent stamps. I gave him a dollar, and he handed me back a dime. (Back THEN, folks sort of expected to be paid for goods. He knew there was absolutely no chance I’d take the stamps and run, so he gave them to me before I paid.) I opened the booklet and counted thirty three-cent stamps. When I got home, my mother let me keep the dime.

Now, that ain’t much of a story. Back in those days, mail went by train (first class) or by plane (air-mail). There were TWO mail deliveries a day (morning and afternoon), and nobody had even thought of high speed sorting equipment to sort the mail or zip codes to expedite the handling of it. Bar codes, NCR numbers, and scanners didn’t even make it to the science fiction novels. If you said “Computer”, you would have been placed in an institution. (THAT was different back then also. It was possible to institutionalize someone who was crazy.)

Today, I go to an inflation calculator on the web and I find that the approximate ratio of costs from then to now is about seven to one. When I went to school, seven times three was twenty-one. If my arithmetic is correct, I should be paying about 21 cents to mail a letter today. Instead, the cost is over TWICE that amount.

Obviously, something is “wrong” with my figures. In trying to ascertain the reason for the discrepancy, I note some differences between today and yesteryear.

For one thing, we now receive mail delivery ONCE a day instead of TWICE a day. Apparently, this is more expensive. It must cost more to amalgamate the mail into ONE pile and deliver it than to put it into TWO piles and deliver it twice.

Another thing is the concentration of people in cities and suburbs instead of rural areas. Apparently it is far more costly to deliver mail in tightly congested compact areas than it is in the rural areas where the folks are spread out more.

They no longer separate mail into “first class” and “air mail”. Apparently it costs more to not separate it.

We have more people. Thus we experience the “economy of scale” phenomenon where the bigger you get and the more business you do, the more expensive it is to process each individual piece of work. Recall the maxim: “It is all right to lose a little on each sale if you can make it up on volume.”

Back then, there was a mailbox every few blocks. Folks would drop their letters in the mailboxes, and a postal worker would drive by twice a day and pick up the mail. This has generally been terminated and now folks are required to drop their mail off at the local post office. Discontinuing this practice has resulted in increased costs as the post office has to dispose of all those old mailboxes, and there are the added costs in trying to find work for those employees that used to pick up that mail and are still on the payroll.

There is the high speed sorting equipment, scanners, bar code readers, and computers that must be purchased. These machines make the delivery of mail much more efficient and cost effective—thus it cost more to process the mail than it did back in the fifties due to the capital outlay costs.

Then there are the new “cash registers”. Back then, the postal worker would carefully weigh the package/letter, calculate the postage, and we would pay the money and get our change. TODAY, it is totally automated. The package is put on a scale and everything is done automatically—even calculating the amount of change and printing a receipt. Clearly, this is faster, more accurate, and thus more expensive than the old methods.

Zip codes generate added costs. By establishing zip codes, a massive study had to be undertaken to determine where to draw the boundaries of the zip codes. Apparently, this cost is still being amortized (from decades ago).

So, folks, while it may LOOK like the costs are “excessive”, please recomember that, “Looks can be deceiving.” On the other hand, “If it walks like a duck, quacks like a duck…”

I guess we can be grateful for all the cost saving devices. Think of what we would pay for mail delivery without them.

————————————————————————————————————————————————————————–　

WHYISIT I’m reminded of the old joke about the guy driving down the highway when he sees a sign,

“Sisters of Virtue, House of Ill Repute”

He says to himself, “THIS I’ve got to see.” and drives into the driveway. He goes to the door, knocks, and a lady in a black habit answers. He inquires, “Is this a house of ill repute?” The nun assures him that it is, charges him $50 and says, “Go down to the end of the hall, and enter the last door on the left. You will be taken care of.”

The guy goes down the hall, goes through the last door on the left, and finds himself outside as the door closes and latches behind him. In front of him is a sign that says:

“You’ve just been screwed by the Sisters of Virtue”

No related posts.

This entry was posted on Tuesday, May 11th, 2010 at 12:22 am and is filed under Authors, Economics, History, Opinion, Tony Demaio. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.