Who Killed the Postal Service? | Hacker News Reader

Who Killed the Postal Service?

theatlantic.com

5 pointsFirebrand8 comments

The only thing that is causing the problem is the federal government has demanded the USPS pay vast riches into a special tax on them alone which the government is calling a "trust fund" for "future pension obligations". This is just a ransacking of the postal service's operating income by the feds. There is no trust fund, the money is not saved anywhere. It goes into the Treasury and is spent by the federal government the same year it is received. 100% of the postal service's financial problems are because of this plunder.

"Salaries and benefits make up 80 percent of the Post Office's budget. By comparison, FedEx spends 43 percent of its budget on labor, while UPS spends 63 percent, according to Businessweek. Why the disparity? As the magazine put it, "USPS has historically placed the interests of its unions first."

You can't simply compare the USPS with FedEx or UPS. Neither of the latter provide regular deliveries. How much would it cost FedEx to have a large enough workforce to visit a significant fraction of the homes in the US every single workday? For that matter, doesn't UPS and/or FedEx have an agreement where UPS does the final delivery of some of the packages, precisely because USPS has most people?

Without that comparison, that comment comes across as a gratuitous slam against unions.

The only reason FedEx and UPS don't deliver mails is because it's illegal to compete with the mail service.

Yeah, stupid Constitution for giving Congress monopoly power over the mail system. Silly also that we require universal postal service at affordable rates in exchange for that monopoly.

I think you're reading into my comment, I was merely stating why UPS and FedEX don't deliver mail and why comparisons between them and USPS are difficult to do. Though for completeness there have been people who've competed with USPS in the past, Lysander Spooner is a notable one.

It would be interesting to see some sort of normalized comparison. I would guess the USPS still spends more on labor, but the raw figures are, as you say, a bit misleading. Two normalizations I'd like to see are: 1) accounting for what proportion of USPS labor costs are caused by its legal mandate to deliver mail to remote areas, which we could approximate by "any area not served by either UPS or FedEx"; and 2) breaking out by delivery mode, for example overnight-air deliveries will have a lower % of money spent on labor costs, not because the labor is cheaper, but because the non-labor costs are higher.

This is correct. One of the reasons that FedEx and UPS have lower costs is that they've been able to turn over many unprofitable "last mile" deliveries to the USPS. In many cases though, this has been mutually beneficial. FedEx and UPS are among the largest USPS customers.

Personally, I have no problem with the US government subsidizing the delivery of the mail to the tune of $5-10 billion per year. The reduction in friction of resulting commerce is easily worth an order of magnitude more. Merely the societal benefit of an utterly reliable and ubiquitous communication system (even if somewhat redundant for certain purposes) has significant value.

Ben Gibbard, sadly.

Reply on news.ycombinator.com