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Kathy Kmonicek / AP
Neither rain nor snow stays this courier from his appointed round, but budget problems are another matter entirely for teh embattled Postal Service.
The cash-strapped U.S. Postal Service is raising rates for its more profitable express mail and priority mail shipping next year, part of its efforts to stave off bankruptcy.
The new prices, which take effect Jan. 22, include the introduction of a new flat rate of $39.95 for overnight express mail boxes weighing up to 70 pounds that are sent domestically; the flat rate for express letters is being increased separately to $18.95. Previously, prices for the overnight service were $13.25 or higher based on package weight and distance.
The prices for priority mail, which promises two-to-three-day delivery, also will increase by an average of 3.1 percent.
The post office said the rate hikes were partly aimed at keeping the ailing agency afloat while maintaining its pricing advantage in the shipping business. Private companies such as UPS and FedEx, which offer similar express shipping services, regularly adjust their prices and have posted modest profits in the sluggish economy.
In the past year, the post office lost $5.1 billion, mostly due to a 5.8 percent decline in revenue for first-class mail. Priority mail and express mail posted a 6.3 percent increase.
Still, the rate increase will make only a small dent in the Postal Service's losses, caused by the recession, movement of mail to the Internet and a requirement that the agency fund future retiree medical benefits years in advance.
Among the increases set for Jan. 22:
- Priority mail, small box, $5.35.
- Priority mail, medium box, $11.35.
- Priority mail, large box, $15.45.
- Priority mail, regular envelope, $5.15.
- Priority mail, legal-size and padded envelope, $5.30.
The new prices amount to an across-the-board increase of roughly 5 percent in postal shipping services. They are in addition to a previously announced 1-cent increase in first-class mail to 45 cents, also planned for Jan. 22. The independent Postal Regulatory Commission will review the proposed increases before they take effect.
Postmaster General Patrick Donahoe has warned that the post office could face bankruptcy next September unless Congress acts quickly to give the agency greater flexibility to close underperforming offices, reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs. The Postal Service, an independent agency of government, does not receive tax money for its operations.
Separate bills have passed House and Senate committees that would give the post office additional authority and liquidity to stave off immediate bankruptcy, although Donahoe says neither goes far enough to address longer-term budget problems.
In the event of a shutdown, private companies such as FedEx and UPS could handle a small portion of the material the post office moves, but they do not go everywhere. No business has shown interest in delivering letters everywhere in the country for a set rate of 44 or 45 cents for a first-class letter.
"We're in a deep financial crisis today because we have a business model that's tied to the past," Donahoe said this week. "We are expected to operate like a business but don't have the flexibility to do so."
Leave a Comment:
Our friendly Jewish bankers will be able to sleep better at night,
knowing your foreclosure and overdue notices weren't delivered on Saturday!
Total "Blankfein"!!!
I choose option #3...
Ship less mail
Sorry, but I refuse to be nickeled and dimed by everyone...for everything.
Raise my mail rates... I ship less mail... that simple... in fact think I will look at on-line bill paying now.
You mail your bills in boxes? :-) That's expensive even before the rate hike. Better to use an envelope and a stamp.
Dont need saturday delivery of more bills. OK buy a roll of forever stamps.
To be entirely correct, a large part of the financial problems of the Postal Service are related to the fact that Congress has been raiding the Service's accounts to cover the red ink of its own deficit spending patterns. If Congress had not been robbing the Service of its revenue each year, many of these problems would have not existed at all for the Service, and Congress' own ineptitude at running the financial affairs of the nation would have become far more evident far sooner.
If you can prove this I would be very interested to post this tidbit to other blogs I post too helping inform others. I just need proof that can be verified.
Would make a most interesting topic to say the least.
http://redtape.msnbc.msn.com/_news/2011/10/07/8191425-twisted-government-accounting-behind-postal-service-woes
watch the hearing on cspan. Head of PO says it to their oversight committe. they actually cloak it as prepaying retirement health benefits (which no other company has to do) but rd14's conclusion has been expressed by many others.
The service of USPS has been underpaid.
The process of delivering our mail is from picking up from a vehicle (maintenance fee of a vehicle, gas fees) and the driver(Postal mail staff) to the building/structures that helps to sort through the mail (the electricity fee, the human resources...)...
But our postage stamp for a regular one is just 44cents.
You are so right...USPS has not charged enough for their services...if they did charge appropriately they wouldn't have to go to the feds to ask for a bailout but by doing so, the problem never gets better. They shouldn't have to get approval for rate increases anyway. That's added to their revenue issues as well.
Agreed. I've thought for a long time they should raise the rate, and significantly. It seems incredible that they transport a letter for us door-to-door anywhere in the U.S. for only 44 cents. It seems to me it should be at least a couple of dollars, with perhaps special rates for same-city mail so that seniors who pay most of their bills by mail wouldn't get hit too hard.
If they would raise the rates, maybe some of that junk mail would disappear. Of course, that's why the rates are so ridiculously low -- lobbyists for the direct mail advertising industry.
One of the results being that post offices in small towns across America have to close. Your corrupt Congress at work. Too bad Obama didn't keep his promise about lobbyists. I'd sure vote for anyone I believed would keep that promise.
Everytime they increase the price of a stamp, I move another one of my bill payments to online. Others will do the same with each increase and their mail demand will continue to drop. It seems the folks like you 3 who are always so quick to say, increase the price, are also the folks who are quick to mention how taxes should be increased. The problem I have is we know there is waste in the post office, there are too many managers and too many poor performing workers, their unionized workforce uses excessively high sick and injury time which lowers productivity and increases costs. They need to address the wage, benefit and 401k problems as well, do we guarranty these folks 8% on pension/401k returns each year like other public funded pensions? Either way, the workforce is being overcompensated in wage and benefits for the work,task, job to perform. As they retire, their positions should be filled with temps and part-timers so the private sector taxpayers are never put in a position to bail the post office out. Last I knew the Post Master was making around $600,000 a year or so, has he made any sacrifices? I say cut all waste, let them have the 5 more holidays they have per year than the private sector but at no pay days and then if they are still short, increase the price of a stamp.
How many of you know the post office is not financed by our taxes? How many of you know that a hugh piece of its income is taken away by the government and used for other things?
The talk about ending the post office is insane. We have to expect to pay more for mail delivery like we do to finance wars and bailout banks or buy gas, etc. Don't you think the Post Office is a better deal than turning it all over to Fed EX and the others where we will pay much more?
Think for a minute. Who actually benefits if we shut the post office down?
How many of you know Social Security is paid for way in advance and is not broke? All that money has been taken to spend elsewhere and now our government doesn't have it to pay it back. So what do they want to do? Shut it down.
Are we that far out of our minds?????
"How many of you know the post office is not financed by our taxes?"
Really? Where does the shortfall come from? If they borrow it (from us)...and don't pay it back.......
How about this...quintuple the bulk mail prices? Think of all the trees we'll save if we stop subsidizing evil corporations.
Wow, if they shut down the post office where will they hang my picture!?!??!
Seriously though, every day I walk outside to a mailbox filled with litter. Why not charge more for bulk mail, instead of shooing away lucrative package business. Even if the new rates are competitive, customers will jump ship based on the amount of increase. I know the post office isn't a government agency, but they sure run it like one.
Mark - You are misinformed. The Post Office generally raises rates every three years. The first year they have excess income. The second year is about break-even and the third year they are running a deficit. They don't borrow from the federal government.
The "bulk mail", now called standard mail pays the bills and is the bread and butter to postal finances.
The union is too strong and consequently the workers don't work very hard or very fast because it is almost impossible to fire them. They are paid too much and have too many expensive benefits. They are not allowed to strike but boy do they know how to slow down even more than their normal snail's pace.
Temporary workers and Contract Stations are a step in the right direction because they know how to work and the lines are shorter and move much faster at Contract Stations than at the expensive overbuilt Main Post Offices that Congress spends time naming after dead politicians. Why does a Post Office even have to have a name? It's about the only thing Congress can agree on.
If you only knew how hard it is (Impossible) To fire someone from the Post Office. I spent 17 years trying to make a difference with the Post Office;
I finally quit and have never looked back. Some of the laziest people I have
ever met work there. But on the same token some of the hardest working folks work there. The union protects those that are useless. I know for a fact that 6 postal employees were caught stealing mail, placed off the clock pending an investigation then 1 year later they were tried in Federal Court found guilty and the UNION got them their job back WITH over 1 year of BACK PAY. Now you have convicted felons (for stealing the mail) back in the same place they
were escorted out of. The union got them their job back because the 6 caught
stealing mail didn't know that the mail they picked up off the workroom floor was not considered trash. If you thought they were useless before they are
now super useless. One woman was placing shipping labels (with her address) on mail packages and having the post office delivers it to her
house! The woman had big Brass ONES for doing this but she got away with it for a long time. All she got was demoted and a written warning, still occupying space at the same post office! When the Postal Inspectors raided her house they found over $60k worth of electronics. (Wonder how much she sold before they caught her) The UNION will be the down fall of the USPS. Get rid of the union, pay the ones that work and fire the ones that spend more time getting out of work than if they did the work in the first place.
The problem with the postal service is with its employees. I work for a law office that does a lot of mailings, a good portion of which we have to take to the post office. It's frustrating when you have multiple large documents and certified mailings to wait in line for some old lady who can't figure out the postage for her Christmas cards! It's 44 cents or a forever stamp. It's made more frustrating by the fact that only half of the desks are staffed and they can't page someone to help the other 5/6 people in line. It's bad customer service that would not fly at any private business.
I'm a union supporter in most cases because I feel that unions ensure that people in certain areas (teaching, manufacturing) get decent benefits and working conditions, but I don't think the postal service needs to be unionized. It protects the bad apples at the expense of most of the hard working employees. It also makes them complacent and less willing to go above and beyond to ensure customer satisfaction. I've complained about the service multiple times. If I did that at a privately owned business, the employees would be written up at the very least. The union ensures that nothing happens to them. Postal service employees don't know how good they have it. They might appreciate their jobs more if they had to work every holiday and for minimum wage like many other Americans.
We are talking about two different aspects of the post office. On the one hand, it is a great deal to have it. On the other is the management problem.
In case it has escaped our notice, every aspect of government and most high flying private intities have management problems. Most of them dump on us for money to make up for their failures.
Unions need fixing in the worst way but the union concept is not at fault. Greedy banking needs fixing but the concept can be workable.
Government needs a huge overhaul and some prison time for many in it but the American Government concept is the best in the world.
Are we getting that?
Unions are just another incarnation of socialism. In both systems, you get the same whether you work hard or not so eventually everybody stops working hard leaving nobody to produce and the system fails without external supports. That's what killed the USSR.
Hey Post Office...here's a clue.
Delivering a letter across the US for 45 cents is stupid. Run it right, or shut it down.
Postage increases are requested by the Postal Service but they have to be approved by the Postal Rate Commission, which is a Federal Agency. The increases that are requested are seldom approved without lowering them or
putting political strings attached to them. All is not how it appears but don't get me wrong. I think the Post Office is poorly run and management heavy.
did anybody else notice the spelling of what i think is supposed to be 'the' in the picture's caption? pretty silly of me, i know, but whatever...
I red teh captoin nad it loked goad two mi.
I won't be paying more for mail because I don't use it. And as far as who is to blame for the postal services financial problems, congress or management? I don't really care, when is the last time you have had a pleasurable experience at the post office? Is it congress's fault that USPS workers don't smile, understand customer service or have positive attitudes. UPS and Fedex are far better and delivering packages, don't make statements such as delivered in 2 - 3 days without a guarantee. I have no problem paying the extra price for faster and friendlier service.
We stop paying for U.S. Post long time ago after they keep raising shipping costs. Simply outrageous. Privatize U.S. Post Office and DMV.
Are you serious? They are losing money! How much do think a private company will charge in order to make a profit? Do you think it will be cheaper? That's like saying cutting taxes will bring in more revenue for the government. Oh wait, that's what the republicans have been saying for years. It's not working.
sam there are ways to cut costs right away if moved over to the private sector. First off, you would not have to pay for the 5 extra paid holidays the postal folks get. Next you cut all OT, next you get right of the Union and pay folks for the actual task, job performed. Look at all the postal workers working the counters selling stampes, they are making $20 plus an hour in wages alone, benefit and 401k are additional costs. The jobs are no different then working as a cashier at Walmart but it pays more than double and they still work slower at the post office. Same for the delivery folks, all making $20 plus an hour in wages alone for such simple work. Sure we will hear from some that its so difficult and cold and such but this country has folks working in the same conditions every day, all day making far less. There is profit to be made if privatized and at least we know we will not have to bail them out if they are.
It cost me .44 to mail my checks and cards. It cost Wells Fargo .34 to mail me my bank statement, Merrill Lynch spends .36 to mail me my statment, Comcast pays .34 to mail my bill. What if they all paid the same .44 that I have to. Just maybe the Post Office would not be broke.
They all would add the cost difference to your bill!
It's .44 for first class. The other rates are less because they are pre-sorted.
My wife and I have found a way to go totally paperless with our bills, and other things we use to utilize the Post Office for because of the constant rate hikes yet the union keeps crying you can't cut pay, cut benefits, cut hours, you can't operate like any other business and cut where you need to, too survive.
What really irritated me was when the Post Office said by law I could not remove my mailbox from my own home! I do not want the f-ing junk mail! They also will not allow me to refuse junk mail using the excuse "someone paid for them to deliver it". That was their own fault I did not ask for it! If I paid for a bus load of pigs to be let into the Post Office. Would the Post Office have to allow the pigs to run the faculity? Why not if I paid for the farmer to release them inside there after all!
I actually had a Postal employee post a note on my door that he could not deliver a package and I had to pick it up at the Post Office because of our dogs. I complained because our dogs were inside our home with two door seperating them from our front door. The Post Master talked to the delivery person and said they heard our dogs and were afraid. You heard my dogs and there for refused to do your jobs? He didn't even see them just heard one barking mind you!.... what happened to "they paid for it to be delivered?"
That incident is what lead my wife and I to find away to never need to buy another stamp or ship anything via the USPS.
p.s. UPS is a unionized company but not so restricted they can not operate like a sane business....
The people in the Post Office in Miami and Miami Beach are downright nasty. Because of this I use online billpay and ups and fedex whenever possible. I hope they go out of business.
The USPS is doomed if they must wait for Congress. That bunch of babbling bufoons can't come to agreement on anything. Congress has become our national disgrace. If they were a private business, the board of directors would have fired them long ago. We Americans need to wake up and stop re-electing those who keep us in the mess we're in.
You guys really have NO clue as to what is going on do you?? The reason USPS is going out of business is due to a little know law passed by Repuglicans back around 2006 FORCING the USPS to over fund it's pension plan. You guys don't see commercials about it on TV. Main reason for this is because the Republicans want to force the USPS out of business so it can then be privatized them. Problem is, USPS is mandated by law to serve ALL rural areas, once USPS is gone these areas will no longer have mail. They may have to drive 50 miles or so just to get it from a UPS or FEDEX office - if near buy. Think your rates will be jacked up now! Also both UPS, FEDEX and other similar carries USE the USPS to deliver mail to thousands of homes that they (UPS, FEDEX and similar) will not deliver to as it is not convenient. As mentioned before the USPS is mandated by law to make these deliveries that other will not.
Read up and get wised up:
"The Postal Service's biggest losses over the last four years can be traced back to a single, unfair restriction forced onto the USPS by the Republican-led Congress in 2006. The Postal Accountability and Enhancement Act of 2006 mandated the USPS to pre-fund nearly 80 percent of its future retiree health care and pension obligations by 2016 at a cost of $5.5 billion per year. No other agency or company in America is required to pre-fund such obligations."
Think about this all you Republicans out there, especially those elderly folks in Florida. If we were to have a Republican President, Congress and Senate, say goodbye to Social Security, Medicare and Medicade as it will all be privatized. (Check your 401K lately - that is what your Social Security will look like under Republican rule). And as you can see in GOP run states, they also want the privatization of the school systems, police force, fire departments and teachers. Can't do that until all the unions are busted. Do searches on the Koch brothers and Grover Norquist and you can see who really runs the GOP. Watch a little of MSNBC at night to get a more realistic view of balanced shows over that continuing drivel of lies from FOX NEWS. Also remember as historical data show, that the pay of the private worker has sunk almost equally with the constantly shrinking union force. Better worry about more corporate welfare nowadays then people welfare.
J.T
John the costs for the pension money up front is still less than the post office is bleeding every year now. That is why they have to close locations, increase the stamp price, and modify their business and address the healthcare costs as mentioned in the article. I wonder John, just how much someone like you actually pays each year in property taxes and how many kids you have. To me, Unions no longer do any good in this country other than for the folks in them. For the other 85% of the folks not in a Union, they do nothing but increase the cost over every single product, service or tax we pay. The public sector Union folks only have to work 25-35 years while the private sector taxpayers have to work 35-50 years to retire to cover the public sector costs. Case in point, household incomes have dropped over the years yet our property taxes have continued to increase. For our household alone, our property taxes increased $400 last year, a total of an additional $1400 a year now since the economy turn down in 2007. Why, because the Union workers of the police, firefighters and teachers (mostly teachers) contracts called for increases during this time. Our household has no kids John but we are paying to educate and feed half a child a year. Now John, how much are you paying, how many kids do you have in public education or did and most importantly how much extra are you sending in for your taxes so that others are not overburdened or are you already overburdening others because you are not paying your fair share? At a cost of over $10,000 plus a year to educate a pupil in this country, most families are not paying anywhere near that in property taxes per year, keep in mind, education is not actually free, others have to pickup the burden when folks are not responsible. So I completely disagree with you John, we need the Unions out of the public sector as taxpayers are not getting anywhere near the value, we are paying premium prices for substandard service. If the Unions are in the private sector, fine, just do not make me have to use them, I want choices and feel and prefer non-union labor where value is actually available.
That just forces me to paying more of my bills online.
You do realize that if the postal service was turned over to privatization a stamp would probably cost us 1.50. This is so we can afford to pay for the CEO salary attached to it.
Perhaps but maybe we would not receive all that junk mail that goes straight to the trash. Even still, I disagree, if privatized, the Unions would be out and wages and benefits could be brought down to Walmart levels putting the company in a position to profit. A non-Union workforce could be held accountable for their actions, less sick and injuries on the job, 5 less paid holidays, lower expenses and lower workforce expenses and taxpayers would not be on the hook for any of it.
I'd be fine with 3-day-a-week service. If something comes to you in the snail mail; by definition, its not very urgent. Do it like the garbage trucks, different areas on different days.
Our USPS is the best in the world and a bargain. Congress has wrecked it by requiring the prepayment of retirement funding. If we can throw them out and install a more honest group that stops the looting of every fund that has a positive balance we might just have a more workable government. Toss the bums from both parties.
Every year I get about 150 lbs of junk mail, 200 or so bills, 5 letters and 3 packages through the postal service...
How sad if all of the sudden I don't get 30 unwanted credit card advertisements or 20 identical bills from sallie mae a month clogging up a mailbox I would prefer to not even have.
Hi All,
Just like any business why can't the Post Office be run outside the realm of the Government, since Congress can't even be consistent, and the Politicians can't seem to work together. Let some one come up with a solution like, buy the USPS.
Sastry