Postal Services Profits example essay topic

The Postal Service has been a government agency since 1775, and since 1872 it has been illegal for anyone but government employees to deliver a letter. Because of this and many other reasons, the USPS is a prevalent example of a government-controlled monopoly. The United States Postal Service is the largest postal service in the world. With over 800,000 employees (778,171 being part-time lobbyists), it is the USs largest employer. In the past few years, the Postal Services profits have risen and productivity has declined. This essay will discuss why this is happening, and look deeper into the government-controlled monster that is the Postal Service.

In the 1980's, few scholars focused on the Postal Service, and today there are many. This is because of all of the controversial issues that have been discovered regarding it. The USPS handles over 43% of the worlds mail volume, and Japan is in second with 6%. The USPS is also the largest airline shipper in the United States. The USPS delivers about 102 billion pieces of first class mail every year, and 20% of these letters arrive late. The average household gets 24 pieces of first-class mail every week, so almost 5 of these every week arrive late.

In New York City in 1998, only 52% of the mail were delivered on time. Swimming champion Mary Meager had her parents send her the 2 gold medals that she won in the Olympics; the medals vanished when her parents sent them via USPS Express Mail. Why are these facts so appalling Most of it can be blamed on the unproductive postal workers. Postal workers, who are considered unskilled, make over $35,000 a year, and that number keeps increasing. These are very high wages for an unskilled worker. The workers also waste a considerable amount of time.

A survey by the Postal Inspection service discovered that the average letter carrier wasted 1 hours every day. Basically, 23% of all postal workers time is unproductive. A GAO study found that the average worker takes 50 days of paid leave every year. And sometimes, mail sent with the USPS doesnt even get delivered. There are numerous stories of Postal employees stealing mail.

For instance, in Chicago, 2,300 lbs. of undelivered mail were discovered at a postal workers home. Once in Rhode Island, 94,000 letters were found buried at a letter carriers home. A Colorado carrier was arrested after 3 tons of undelivered mail was found at his home. These are just a few of the stories of the workers keeping mail as their own. And some undelivered mail isnt even because of employees stealing mail. During the 1970's, the CIA opened mail routinely.

The reason behind this is because of the spying going on at this time between the U.S. and Russia, but this is still unnecessary. A Postal Inspection Service audit found properly addressed mail dumped in the trash at 76% of the Post Offices visited. This number is completely unnecessary and uncalled-for. At USPS headquarters, there are 11 members of the board and 50 economists, accountants, and lawyers on the commission. With all of these workers, you would think that the service wouldnt be having problems like this. The Postmaster General is the head of the service.

The current Postmaster General is Marvin T. Runyon. Former Postmaster General William Henderson had this to say about the Postal monopoly: I believe that the Postal monopoly will not last forever. Hopefully, he is right. According to Henderson, one in every 200 letters is delayed or mis sorted.

In 1970, the USPS created the Postal Reorganization Act, trying to be redeemed. This was when the service officially became the United States Postal Service. Before that, it was just the Post Office. This Act had limited accomplishments. When the service was losing vast amounts of money in 1979, there was talk of privatizing it, but nothing pulled through.

Many people hope that the service would once again consider privatization. If the Postal Service did privatize, it would be the tenth largest company in the U.S. The USPS attempted reorganization again in 1983, and once more in 1993. Both attempted reorganizations failed miserably. The Zone Improvement Plan (ZIP) codes were introduced 1990's; this code added 4 non-required digits, for 9 in all. Since 1958, the price of a postage stamp has increased in 1963. In the early by 825%, and in the last 20 years, that price has increased by 18 cents.

On January 10, 1999, postage rates for non-profit organizations increased by an average of 9.6%, while business rates only increased by 1.79%. Is there some particular reasoning for the USPS to pick on non-profit organizations So far, there is no proof of this. There are over 39,000 post offices in the U.S., and about 130 million delivery points. The USPS processes about 38 million address changes annually. In some rural areas, mailboxes are placed as far as 40 miles away from the home, for the convenience of the deliverer and the inconvenience of the homeowner.

This seems strange because UPS and FedEx both target rural areas. In fact, 40% of UPS delivery spots are in rural areas. The Postal Service receives close to 50 times the amount of mail of FedEx and UPS combined. There are also some unfortunate laws that the Postal Service has helped Congress pass. By law, the mailbox that you buy and install on your property belongs to the government. The Postal Service reserves the right to cut across peoples lawns when delivering mail and postal vehicles are immune from parking tickets.

The USPS reserves the right to search the mail for contraband something that looks funny or out of place. UPS and FedEx are both strongly against these so-called contraband searches. Federal Express and the United Parcel Service are the two main competitors the Postal Service, but there are also 300 other alternative delivery firms. By law, private companies must charge at least double the amount that the USPS would charge for the same letter.

Furthermore, the USPS has its own police force that can search packages sent through competitors if it believes that the sender is violating the services monopoly laws. Of course, the USPS doesnt do this as much anymore after a lot of bad press and over $0.5 million in fines. Private companies, unlike the USPS, cant just raise their prices because of increasing costs. How do these companies stay in business Heres how the employees compare: The average UPS employee moves three-times as fast as the average Postal deliverer, and the average FedEx employee moves twice as fast. There is one manager per 10 workers at the USPS, compared with one for every 15 at FedEx. Other ways to send letters without using the Postal Service include fax and e-mail.

It is estimated that 43% of faxes represent a diversion of communications of the mail, and in the 1990's, e-mail has also taken a chunk out of the Postal Service. The Postal Service is entirely exempt from complete compliance with the Occupational Safety & Health Administration. Basically, the OSHA may not fine the Postal Service for unsafe working conditions. This should not be, because their employees do a lot of stressful, repetitive tasks. In fact, in 1994, Postal Employees counted for 29% of federal agencies working compensation claims. Also that year, the service paid over $521 million in workers compensation claims, death benefits, medical expenses, and other expenses.

The Postal Service tried changing its public image in 1997, spending millions of dollars on Whats Your Priority ads for Priority Mail. In one month, they spent $275,000 on ads in the New York Times, telling the public how hard they will deliver for you. The ads seemed to pay off though; they have generated more than a $500 million increase for Priority Mail. But unlike its competitors, Priority Mail 2-day delivery is not in any way guaranteed. In the Postal Services latest cry for attention, they have introduced a new Postal Notes advertising campaign.

These ads tell little known facts about the service. For example, one ad says that the Postal Service uses donkeys to deliver mail to the bottom of the Grand Canyon, bush pilots to deliver to the Arctic Circle, and mail-boats for along the bayous of Louisiana all for the price of a 33 cent stamp. These ads have cost about $12 million. The USPS also spent about $7 million to change their long outdated logo to the Sonic Eagle in 1997, and almost $4 billion to put together over 5,000 pieces of automation equipment.

The service spent $232.4 million of its $143 million budget on advertising, nearly $90 million over budget. Looks like the USPS thinks the only way to get more business is through numerous advertisements. In 1995, the USPS owed the U.S. Treasury about $9 billion for borrowed money. It is rare for the Postal Service to have more profit then debt.

Surely not because they dont make enough, but because they borrow money in immoderation. In fact, when the service turned a profit, like in 1995, it was only the eighth time during 24 years. Currently, the United States Postal Service owes the U.S. Treasury somewhere around $7.3 billion, not much difference since 1995. In one USPS ad, it says the following: If it surprises you that the U.S. Postal Service is not funded by tax dollars, join the crowd.

This is terribly misleading though; contrary to popular belief, the government does fund the USPS. In fact, in 1996, the government gave the USPS almost $770.9 million. What do they do with this money They spend most of it, 84%, on its employees. The USPS net income has gone down considerably every year. It has gone from $1.8 billion in 95, to $1.8 billion in 96, to $1.2 billion in 97.

Many people are urging the USPS to consider privatization. Because of the vast amounts of money that it is losing, it may do just that. But until then, if the service continues at this pace, we can expect to see higher prices, longer zip codes, more unproductive workers, and the USPS even farther in debt.