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Tue June 26 2018 00:13:02

Would Privatizing the Post Office Help Online Sellers?

By: Ina Steiner

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In April, President Trump created a task force to look at postal reform. The President's Task Force on the United States Postal System will publish its recommendations by August 10, 2018.

Last week, the White House had more to say, opening up the possibility of privatizing the post office. "Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations" covered recommendations for "structural realignment of the Executive Branch," including a restructuring of the USPS, while noting that some of the more significant changes would require legislative action.

The 132-page report is available in PDF format on the WhiteHouse.gov website - skip to page 70 to get to the section titled, "Restructure the Postal Service." 

Here is the summary of the proposal: 

"This proposal would restructure the United States Postal System to return it to a sustainable business model or prepare it for future conversion from a Government agency into a privately-held corporation. Like many European nations, the United States could privatize its postal operator while maintaining strong regulatory oversight to ensure fair competition and reasonable prices for customers. The President's Task Force on the United States Postal System will make recommendations on reforms towards this goal in August 2018."

The USPS issued the following response to the restructuring proposal, available on the USPS website.

The call for postal reform has been ongoing for years - five years ago, the USPS said it was facing an "unprecedented set of financial challenges heightened by the inability of Congress to pass comprehensive postal legislation," which it has still yet to do.

But such a direct call for postal privatization is noteworthy.

What is also new: The President's task force will examine the definition of the universal service obligation in light of what it says are changes in technology, e-commerce, marketing practices, and customer needs.

Redefining universal service would be significant, and would make it easier to reduce and/or privatize the US Postal Service.

How do you think restructuring and privatization might impact USPS service and shipping rates for your ecommerce business?

Update 6/26/18: Government Executive published an article this evening about the the privatization plan's reception by lawmakers.

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Readers Comments

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This user has validated their user name. by: Ming the Merciless

Tue Jun 26 21:18:39 2018

If privatization drives down cost and increases service, why do UPS and FedX raise their prices every year?

Because they can.

The only reason these greedy shippers don't cost more is because of USPS lower rates!

The issue with USPS is that Congress required them during the George W administration to their pension program 70+ years into the future. The purpose of such an outrageous requirement was to bankrupt the Postal Service so that it could be sold to some large Republican donor aka "privatized."

USPS does an outstanding job for me, and I can't praise them highly enough though I realize others don't receive the exceptionally high service level I receive.

Privatization will drive up shipping costs with no guard rails in place.

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This user has validated their user name. by: The End

Tue Jun 26 21:53:22 2018

Papa died with the mailbag on.
He was dead before he it the sidewalk.
Nana woke up a wife and went to bed a widow.
She lived like a queen for the next 42 years.
Pension.

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by: Carol Is Here This user has validated their user name.

Wed Jun 27 01:27:36 2018

USPS is a mess. The attitude of postal employees to the public is very bad. They even harass each other.

Going slow, complaining about work, breaking rules, overcharging, the incompetence is unbelievable.

There is a post office run by a guy who complains about doing any work at all, won't do it,  and harasses customers and even female employees of USPS, who are doing all the work and trying to hold it together. Nothing is done.

I've watched a USPS clerk look at a line of 50 people and then chat with a customer for 20 minutes, hen wander around looking for stamps to then talk about their designs. Intentional go slow. People are afraid to speak up or complain.

There are unneeded distribution centers and offices that need to shut down. People who refuse to work need to be fired. It never happens. Delivery people who steal mail and misdeliver. They keep on working.

USPS tries to gloss it over with the China income that Americans cover, but the whole structure is a mess and needs to be dismantled and rebuilt.

They now are raising postal rates twice a year. Small business can't compete with Corporations and the Chinese..  

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by: Carol Is Here This user has validated their user name.

Wed Jun 27 01:29:54 2018

Ming, it's not a Republican plot lol.

The USPS is a mess all over the place but has the willingness of all politicians of all parties to enable it all because of the union voting bloc.

The union that treats decent postal employees badly in favor of the problem ones that fill up the system.

The result is harm to small and medium business.  

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This user has validated their user name. by: Rexford

Wed Jun 27 06:37:29 2018

I can see Pitney Bowes running it now.  

We'd all be paying through the nose.  BAD IDEA to privatize, but if the Republicans stay in power I can easily see it happening.

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This user has validated their user name. by: RKTOYS

Wed Jun 27 09:37:56 2018

@Carol
Sure, it's the evil union boogeyman again.  Nepotism never protects bad employees, right?

Ever notice, the redder the state, the more outrageous the complaints?  Government in red states isn't run by aliens you know.  If you don't value education or ethics/empathy, why are you surprised that locals are dumb, crooked, or both?

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by: Snapped This user has validated their user name.

Wed Jun 27 10:06:11 2018

If the USPS was so 'incompetent', why does FedEx and UPS utilize it for such a bulk of their last mile delivery obligations?  Approximately 15 - 20% of the parcel and spur deliveries made in a given day are commercial carrier 'partner' handoffs.  Read that as YOU paying a higher cost, so THEY can pay someone ELSE (and pocket the profit) to complete their contract.  Why do they do that?

Because the USPS is the only entity that delivers to every household and business every day, that's why.  It is the ONLY entity with an existing, efficient, and constantly evolving infrastructure already in place to do so.  That would have to be 'recreated' from scratch, privately.  Guess who'd pay for that?

Those 'meetings' that seem to some to be no more than an excuse to avoid customer service?  That's the postmaster being raked across the carpet by district and regional management accounting for wait time in line failures, and parcel select, priority, and express mail delivery delays.  You can bet your bippy those issues are being addressed.  And those dung balls grow mass rolling down the hill.

Your carrier - in all weather - is now carrying 40% more 'must have now' boxed and poly bagged trinkets than they did 24 months ago, along with an increasing volume of unsolicited advertising, and doing it with the same time constraints imposed to save cost from the onset.  In fact, many are severely overburdened now, as more routes are eliminated and 'consolidated' into others - to save costs.  And don't get me started about the too many inconsiderate dog owners out there.  It's not a cliche', its an ongoing labor reducing reality that literally bleeds daily.  

Mid summer.  How many of you even think to offer your carrier a cool sip of Agua now and then?  And bless you, those who do.

It is good to see though, there isn't total ignorance about the Congressionally mandated and ridiculously burdensome 'retirement funding' that turns operating profit into unsustainable net 'loss'.  Or that China ePacket disadvantage isn't a USPS 'choice', or even considers USPS 'reason' when being periodically re-evaluated.  

As for Mr. T's pity-the-fool who carries AZ boxes at loss lies, good to know there are folks who understand such is literally legally impossible.  The USPS is Congressionally mandated to deliver at cost below revenue for every one of Bezo's Boxes.  

Sure, there will be errors and lasiez-fair, and even incompetence out there.  What organization doesn't have that?  Doesn't excuse it of course.  So, sure, it seems 'reasonable' to believe such malfeasance should be promptly 'eliminated'.  

The 'union' protects against that though - to be fair, so such action otherwise unwarranted, or motivated by 'personalities' isn't made easy - so it takes time and process and paperwork to prove need for drastic action.  But it does work in the end.  Incapacity doesn't last forever.  And it's not being tolerated.  But all that 'paperwork' also takes time away from the window too.  

Meanwhile, try to bear in mind that every postal worker is a postal customer too.  And there's no 'employee discount'.  FWIW.

In the end analysis, no matter where one solicits service, one should expect to achieve fast, accurate and cheap.  

Two of those can usually be guaranteed.  The third is a matter of individual choice and related tolerance.  

Privatization won't expand that.  The 'street' won't let it, nor care.  Be careful what you ask for.  You might get it.

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This user has validated their user name. by: toolguy

Wed Jun 27 10:29:16 2018

Postal Pensions are one of the best in the US

My brother just put in 41 years at the Tucson Post office.

His retirement will be 85% of his base pay.

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This user has validated their user name. by: toolguy

Wed Jun 27 11:11:54 2018

Carol. you are 100% correct that the Post Union protects the deadbeats!

It was no different at Boeing (machinist union) or at Alberston's (teamsters union)

Unions protect lazy employees at the expense of those willing to work!

I don't like unions, they've put me out on the street more then once because of seniority not productivity!

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This user has validated their user name. by: Ming the Merciless

Wed Jun 27 14:59:08 2018

I'm neither pro or anti union as there are pros and cons on both sides.

However, the decline of labor unions caused by the continual Republican big business assault coincides quite well with the overall stagnation and therefore decline of American wages inn the name of greater profitability.

Another reason big business/Wall Street wants to privatize everything they can so that privatized agencies can produce more profit for owners and stock holders while holding wages at the lowest possible level and still retain workers.

On another note, USPS may be in trouble in some locations, but where I live they are exceptional.

@Marie

Do some research on the meaning of anti trust and why this country has laws on the books to regulate businesses who engage in monopolistic, anti trust practices.

You could start here:

https://www.investopedia.com/terms/a/antitrust.asp
>Here
are a couple of relevant excerpts:

"What is 'Antitrust'

Antitrust laws are the laws that apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution and marketing. They prohibit a variety of practices that restrain trade. Examples of illegal practices are price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power.

Antitrust laws are necessary in an open marketplace. Competition among sellers gives consumers lower prices, higher-quality products and services, more choice, and greater innovation."

While ebafia has duplicitly claimed in court cases that  they are only a venue, the fact is that they sell services such as advertising space, shipping labels, and now a payment service which will likely be as restrictive as the use of PayPal was when ebafia owned it.

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This user has validated their user name. by: Marie

Wed Jun 27 16:50:08 2018

@ming

I think this is more a sheer and utter dislike for Ebay, not a factual one.  Amazon has had their payment policy for many years.  If it were to be an anti trust violation, a reasonable person could assume they would have been stopped by now.

It boils down to the lack of trust in Ebay management.  They have earned that lack of trust and I completely understand that as I stated before.  But I don't think they are going to be doing anything illegal by simply having a payment process like Amazon and Etsy.

That certainly could change if Ebay tries any funny business, but time will be the judge of that.

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by: TomH This user has validated their user name.

Wed Jun 27 16:56:21 2018

@Snapped

Excellent summation. The only thing I would like for Congress to do is clean up the retirement capital forward paying mess that THEY created.

If that was done, I think the Post Office could sell
forward quite easily with much less stress on the capital structure.  

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This user has validated their user name. by: ebaydeserter

Wed Jun 27 17:38:04 2018

@Snapped
Well said as usual!

@Toolguy
I don't believe that I'll be putting in 41 years!
The insanity of current working conditions ensures that!

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by: Oh Really? This user has validated their user name.

Thu Jun 28 00:35:30 2018

Privatization in and of itself would not necessarily be a bad thing, it has worked well for many other major postal services.

However, the end of Universal Service would be a disaster for many people both buyers and sellers and for anyone who uses the current postal service that does not live in major urban centers and the closely  surrounding rural areas. For anyone else delivery costs, if the service was even available, would skyrocket.

If Universal Service were to end who would deliver the ''last mile'' for millions of items carried by UPS & FedEx who use USPS because their own networks do not cover areas they deem uneconomical?  

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by: Barbbie This user has validated their user name.

Thu Jun 28 00:44:02 2018

NO, what a disaster!
The government oversite part is funny, they oversaw the epacket disaster, so they keep it and force it on the "private" company who has to make a profit and make it even more expensive for sellers....NO WAY that would work!

I don't have a problem with my post office. I love it when someone tells me to ship it cheaper with UPS or FEDEX and I get to wake them up to the real rates. so the private post office would be cheaper, I don't think  so.

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by: Tiffee Jasso This user has validated their user name.

Thu Jun 28 02:17:34 2018

Canada tried it and due to the high theft rate, unreliability, and poor reputation with other countries,  they took back their Postal Company. That said, I am sure Mr. Trump will try as it is a disruptive tactic and that is his style. However, the government is getting the benefit of billions of dollars in their pocket as Congress has mandated the  Post Office pay 75 years in advance for retirement benefits. Congress has borrowed several times from Social Security and has never paid a dime back, I am sure they are doing the same thing with the Post Office retiree account. When it starts to run out money they will holler it is an entitlement that the government cannot afford to pay and start cutting the amounts. Nothing will be said about how much they owe the account and how much interest was lost because they (stole), sorry, I mean  borrowed the money with no intention of ever paying it back.  

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by: BargainzBabylon This user has validated their user name.

Thu Jun 28 02:32:44 2018

In Washington state we got rid of the state liquor stores. I voted to privatize them because I don't think the state has any business peddling liquor.

Many voted because they decided that privatization would result in lower prices - no more of that "big bad government fixing prices!"

As I predicted, when it went private, liquor prices went up in many places - of course they did, it's what the market will bear.

The WHINING!  

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by: Paul W This user has validated their user name.

Thu Jun 28 02:50:03 2018

No private company is going to deliver a letter for 50 cents to remote locations, or a 4 ounce parcel to Guam for $3.50.  Privatizing would put most online sellers out of business as shipping costs would skyrocket.  If you thinks UPS and FEDEX rates are high now, just imagine where they will go if there is no USPS to compete with.

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by: Moonwishes This user has validated their user name.

Thu Jun 28 04:08:43 2018

I love my local PO and their employees and my mail carrier who I was sad to learn is reaching 65 soon and may retire. The only problem I ever have with the PO is those horrible Sunday deliveries, where they use carriers from the nearest big city who are idots. I have found mail deposited in the neighbors garage a week after delivery, left 2 hours after my usual delivery lady, Nancy, had been there and broke the snow all the way to the front door, so no excuse for leaving it next door! I have found a soaking week package On Tuesday morning that supposedly had been delivered on Sunday. Well considering that the package wasn't there on Sunday or Monday, means the Sunday carrier marked it delivered and then came later to leave it outside in the pouring rain. I have found boxes left on top of the mailbox for anyone coming along to grab. It is ridiuculous and always a sunday or substitute driver. It got to the point that Nancy before vacation weeks would tell me that she wasn't delivering so to watch out for where my mail ended up. One package dumped by the front door that I found when I came home with close to an inch of snow on it prior to a two foot dump of snow. We may not have seen the package till spring. The sad thing is, all my Amazon packages come with a note right in the address label as to where to put them if there isn't room in the mailbox! Like I said the problems that I get have nothing to do with our local PO, they are terrific at all times and I am always met with courtesy and respect and the lines keep moving. Possibly since our head clerk is a retired Marine, and he keeps things going well. If I am his only customer we will stand and shoot the breeze for a few minutes, but customers in line,he keeps the line keeps moving.

I wish everyone had that kind of PO and I think it is one of the reasons that my mail rarely goes missing as it gets a good start and is sent to the right sorting facility, etc.

In this day and age, I can imagine any company that would take over the PO would be reasponsible to share holders that always want more. It seems like that is when ebay went bad was when they went public not that they give their shareholders anything!

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This user has validated their user name. by: JusTrains

Thu Jun 28 04:37:14 2018

@Silver Ice King

Now that's a really, worthy post - Thanks!

CONGRESS:
It's a "Make Work Program" - not a "Get Work Done Program" ...to keep those, generally speaking, in Congress ..."Employed"

Arrrgh!

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