Ways to save the Post Office money (1 Viewer)

[Ben Osborne]

If the post office were truely efficient, then revoking the law prohibiting private mail deliver would have little effect on them or on the level of service provided to the recipients of mail service.

Great point Ashley. There's no reason for people to argue about whether or not private companies could be as or more efficient than the post office. Let's just repeal the Private Express Statutes and see what happens. I'm hearing a lot of people defend the post office, but I'm not hearing any justification for these statutes.

 

[Todd Hochard]

Inflation is about two cents of this increase. It is the one cent increase that is the result of the factors discussed above.

Fuel costs? UPS and FedEx have bumped their rates for this (in 2000, and again in 2001).

Todd

 

[Ashley Seymour]

Fuel costs? UPS and FedEx have bumped their rates for this (in 2000, and again in 2001).

The initial post for this thread implies that the Postal Service is raising rates because it is loosing money and the rest of the posts speculate that it is because of the inefficiency of the institution.

In my post I did a cursury examinatin on the effect of inflation and postal rates and argued that a good share of the rate increase was no more than a reaction to rising costs faced by the Postal Service. Doing a search on the web for the rate of inflation for the past 10 years and postal rates, I believe my first assumption of the rate of inflation of about 1.5% was a bit too sanguine. Perhaps by half, as prices have increased approximately 30% since 1991. Postal rates in February 1991 were adjusted to $.29. A 30% rate increase would bring the cost of a stamp to $.377 and the Post Office said this rate increase would be good for two years. If anything, the Postal Service has held the cost of stamps to a total equal to inflation or possibly lower.

We can hardly criticize the Post Office or any business from adjusting rates and prices to reflect the effect of inflation.

The cost of fuel is a factor of inflation but with a caveat. While inflation is defined as the cost of a basket of goods and services, hardly any business is subject to the same costs as an average household. It is quite possible that the Postal Service has higher fuel costs as a percentage of its expense as does the average homeowner. It is also just as likely that it does not. The biggest expense for the Post Office is labor, as it is with most business. The Postal Service does implement machines to automate labor intensive sording, etc. as does most other busines today so... it is hard to see how the rate increase is an indication of severe problems at the Postal Service.

 

[Mick B]

FYI Airborne Express now drops off some of their packages to local post offices for delivery by postal employees in the city and rural areas. Been going on for about a year now. As stated in an earlier post, people in the rural areas would suffer the most by privitization.

Mick

 

[Todd Hochard]

Ashley,

I'm confused. Which side are you arguing?

 

[Ashley Seymour]

Ashley,

I'm comfused. Which side are you arguing?

As with most business and economic issues the problem exists because of several issues and a simple choice of one side of the other is not the cure.

The opening thread wondered if reducing costs wouldn't be better than raising rates. My last post argued that raising rates is not unreasonable simply on the basis of keeping up with inflation.

I think other businesses and continued revolutions in communication will continue to undermine size and impact of the Post Office. These changes are all but guaranteed.

If rates go up faster than inflation then the effect may be to drive business away even faster.

In the short run do the rate increase and consider reducing service. Maybe consider offering new services that offer a good profit potential.