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Originally Posted by jthomas1600 I've learned a few things as this has been on the news. There are US Postal mail carriers who deliver mail with mules in the grand canyon area and there are US Postal mail carriers who deliver mail on foot using snow shoes in rural Alaska. So.....nope....UPS won't be doing that. And it's a vital enough service I'm not opposed to tax dollars supporting (in part) the postal service. |
I like the idea that has been stated about splitting service areas in half and offering every-other day service to cut (by roughly half) the amount of manpower and other resources needed. No one sends anything by USPS to get somewhere in a hurry anyway (if you are in hurry, you would send an overnight FedEx).
An idea for the scenarios mentioned above might be for the USPS to, instead of staffing a post office or postal worker to physically deliver to remote locations like that, to contract with another service provider such a local utility meter-read to deliver US Mail while they are on their run to that location anyway. So in remote areas like that, "bundling" mail delivery with the other services being "dropped" at that location might be a way to save money.
Overall, I agree that daily mail service is not a profitable enterprise for FedEx or UPS to take on, at least not without drastically raising prices. From an operation cost perspective, USPS would be well-served to gut
all operations except every-other-day one- or two-stamp letter delivery, leaving packages and other services entirely up to FedEx or UPS . A more moderate solution may be to contract with FedEx/UPS in such a way that USPS pays FedEx/UPS a fixed cost by weight (still lower than their current cost) for transporting a USPS parcel via the FedEx/UPS distrubition system -- so in a sense USPS would be "renting" the distribution network for those parcels. From a profitabilty perspective, the conundrum is that letter-only service is likely also the least
profitable service, as the cost of flying or driving one ton of letters or one ton of 3 or 4 giant packages is the same (relatively), although one ton of letters at $0.44 might bring in more revene per "run" than 3-4 giant packages (hmm).
The goal would be for USPS to find a way to simultaneously cut costs and raise profits. One way to cut costs might be by contracting with FedEx/UPS to "rent" their distribution networks for a lower cost per-parcel than they are currently running (especially for big packages). For everyday letters, the split-service model would likely save a ton of money while providing only a minor inconvenience for consumers, and raising the postage rate would raise revenues and raise profitability by a large factor. The question is, will even these savings (and new revenue) be enough to cover the pending legacy costs?
The private parcel companies have demonstrated that they have a more efficient network in terms of delivery time, etc., but not necessarily a lower-cost network. But cost is deceptive: while a stamp is about $0.44 and a priority overnight FedEx envelope runs about $18, I wonder if when you factor in the legay costs of the USPS (and remove all government subisidies), what that does to the per-parcel cost of mailing an envelope? Which service is
really cheaper when all factors are considered? FedEx has no one but the consumer to turn to to pass along operating costs to -- USPS has funding from the Treasury to close the gap between revenue and operating costs.
Good discussion.