June 2001 - Apparently not every literate creature is human, for I've
just seen what happens when you teach a weasel to write. There's a fine
example of weasel scratchings at http://www.usps.com/ratecase/govdec.htm
Actually it's the web page where the Post Office tells the Postal Rate
Commission "bite me!"
Seems the mail carriers couldn't wait till New Year's to give us our
annual gift of a rate hike, so it's happening now. The first ounce of
First Class will be unaffected but extra ounces will cost more. Money
Orders go up 16%, Certified mail 20%, and business mailings a cent or
two. Sure those are small boosts but they rake in an extra billion
dollars for the postal megalo-giant this year. It's hard to visualize
but they have more money than Bill Gates.
This unwelcome news comes despite the Postal Rate Commission (PRC)
telling the Post Office "no way". In fact the PRC said it three times
but entrenched postal bureaucrats aren't taking no for an answer. The
Commission also tried to shut them up with an extra $97 million for
"costs associated with supervisory personnel," but it didn't work.
It's all about money. Seems the old postal institution is facing a
modern dilemma: either change with the times or close your eyes and
think of the good old days. Like most bureaucracies the PO prefers the
second option, and like most bureaucracies they get the glue squeezed
out of them every time. In years past UPS and FEDEX took schnauzer
bites out of their shorts, but today it's e-mail kicking their butt ...
e-mail is free, instantaneous, and delivers in any weather. E-mail also
saves you tromping to a community mail box through a minefield of doggie
I will admit the nice folks in the blue or gray uniforms have been
inching their way back towards competitive reality, but only inching.
They offer new services and a zippy new web site. And their ideas to
drum up new business, though transparent and doomed to disappoint, are
at least sincere: April was "National Card and Letter Writing Month" and
one web page begs strangers for "visionary business ideas and proposals
that will help us continue to deliver quality services".
Regardless of this smoldering innovative spirit, their managers are
mistaken in thinking they can defy gravity. Any $70 billion business
requires $70 billion worth of customers to break even, and you can't
just keep raising rates till you get there because your final customer
won't pay $100 for a stamp. As things stand today banking and shopping
on-line are reducing paper checks and catalog mailings. Digital
signatures are reducing demand for paper documents. Even those
magazines in brown paper wrappers are delivered in complete privacy over
the internet. It's an old story - mail carriers are losing their trade.
If the good old PO can't see the writing on the wall, what's propping
them up (you naively inquire)?
Why the very same thing that spares most government agencies: a Federal
safety net. The PO found a clause to shield them from the effects of a
stumbling economy and deserting customers. They are dusting off a
little known and controversial loophole in the Postal Reorganization Act
which says the PO must ensure revenues are sufficient "to maintain
postal services of the kind and quality adapted to the needs of the
United States". Known as the "break even clause" it hints their income
has to equal their expenses in providing the necessary level of service.
Necessary level of service ... common sense dictates we're no longer as
dependent upon the US Post Office. Sensible folk will argue the "break
even" clause doesn't dictate the level of service never be reduced,
can't prevent new technology from sidestepping postal carriers. The
Post Office takes a different view. They argue income must rise to
match their outlay scheme.
One might say the PO is turning a blind eye - refusing to face facts -
inventing reasons to stay in business. Take, for example, the new
services on their web site. You can now go to their site to design your
own greeting card on-line and send it to someone, but the PO idea of
"innovation" is to then take your electronic card and print it out, drop
it in a pouch, and deliver it on foot ... either they just don't get it
or they need to prove we can't live without them. Sure a lot of people
still want the paper cards on their doorstep, but I'm sure they'd prefer
a nice Hallmark or Shoebox greeting to something that rolls off a
But my words can't do their web page justice. You need to see it for
yourself. I think you'll find it tastes a lot like public opinion
damage control. They present themselves as a long suffering
mega-corporation, crying about being forced to raise rates on one page,
then bragging three of their PO services qualify as Fortune 500
companies on another. I'll bet when old Ben Franklin started this
operation he would have been content with 800,000 employees and a budget
near $70 billion. Not so his heirs.
In hiking rates the PO propagandizes their need for "... a reasonable
provision for contingencies." By reasonable they mean an uncommitted
reserve of nearly $2 billion a year to use as needed for "the adverse
impacts of the unpredictable". The Rate Commission allowed them about a
billion ... obviously not generous enough.
When the Rate Commission asked for proof more money was needed to handle
unforeseen circumstances, the Post Office weaseled then produced experts
to testify "... it is nonsensical to attempt to predict the
unpredictable." A few paragraphs later they spun counter-clockwise to
say they've calculated the unpredictable and it absolutely requires a
bigger contingency fund. They've done the imaginary math.
While the Post office claims they and only they can predict the future
with pinpoint accuracy, they do confess to having trouble with the
near-term math. So far this year they twice decided their predictions
were so poor they needed to raise their cost estimates. The PO frets
about being a billion short which is in itself surprising, since their
budget is almost 10% higher than two years ago (just 63 billion then,
today it's 69).
The term "reduced income" comes readily to their parched lips, with the
possible but unquantifiable causes being "... the state of the economy
... increased diversion to electronic and other means ..." Like most
institutions they're quick to blame woes on shrinking income but even
the weakest link knows income has nothing to do with outlay. If you are
steadily losing customers you need to spend less on expenses not more.
Not 10% more! Not $6 billion dollars more!
I only mention this grade school axiom because nine members of the
postal Board of Governors, former bankers and consultants and
industrialists, have inadvertently overlooked it. One hopes they will
be open to suggestions of resizing their services to fit the reduced
customer base since their web page states "Prudent managers of any
business must use their judgment to assess the uncertainties that may
lie ahead and plan what is necessary to plan for and survive the risks
associated with these uncertainties".
They presume the year 2002 will be unlike any of the previous 226 years
because next year threatens "financial risks [and] circumstances quite
different from those that had allowed the Postal Service to succeed in
recent years with relatively low contingency provisions." I'm not
certain what horrible sort of catastrophe they expect in the next 18
months, but if the world is ending you can be darned sure we'll hear
about it by e-mail long before the official envelopes arrive.
I encourage you all to visit their web page, to look at the smiling
Board of Governors who direct and control the PO's $70 billion in annual
spending, conduct long-range planning, set policies and service
standards. And if they won't listen to the Postal Rate Commission
perhaps they'll listen to the customers they serve.
All together now, ready? Grow up Post Office! You're over 200 years
old! America's best known pundit of common sense got you started.
Offer something better than e-mail, cut your expenses, but don't ask us
to subsidize your losses.
And take the pencil from that weasel. If those are the best excuses he
can come up with, he's giving you a bad name.