In July 2009, the Government Accountability Office (GAO) listed the budget of the United States Postal Service as “high risk” and recommended oversight from Congress and the Executive Branch. Specifically, the GAO stated that “Amid challenging economic conditions and a changing business environment, USPS is facing a deteriorating financial situation in which it does not expect to cover its expenses and financial obligations in fiscal years 2009 and 2010” (“Restructuring”, 2009, pg. 1). The GAO claimed that the mail volume in 2009 would likely decrease by about 28 billion as compared to 2008 and that the USPS would likely see declining volumes for the next five years (“Restructuring”, 2009, pg. 1). Clearly, the USPS is currently facing a …show more content…
If the mail monopoly were removed, then private companies would quickly gain control of the most profitable routes, leaving the postal service with universal obligations but no profits and therefore no funding with which to serve these routes. Many economists have challenged this urban to rural subsidy. In a testimony to the President’s Commission, Robert H. Cohen, an economist and the Director of Office of Rates at the USPS, demonstrated evidence that universal service does not depend on a postal monopoly. In regards to the urban to rural cross subsidy, Cohen (2003) claimed that “the proportion of unprofitable routes in the U.S. is approximately the same for urban and rural areas” (pg.2). Cohen conducted this study by examining “rural carrier routes” and created a list of these routes ordered by the number of mail boxes delivered per mile of the route (pg. 14). Since these rural routes inevitably include some urban routes as well, Cohen (2003) only looked at the bottom 60% of his list, or those routes which deliver the least amount of mail (pg.14). He found that of these routes, 53.1% are profitable and 46.9% are unprofitable earning a total profit of $175 million in 1999 (pg. 14). In comparison, 56.5% of the urban routes that he looked at were profitable and 43.5% were unprofitable earning a total profit of
Especially in urban cities buzzing with the latest technology, many would agree that, “you don’t need a full-service post office every few blocks in New York, for example” (Source A). In addition, I spend every summer with my dad in Chicago, and because there is a USPS post office right around the corner of our apartment building, I have noticed from passing it every day that it is the one store on State Street that is empty 90 percent of the time. In my experience, Postmaster General John Potter is correct in wanting to “close and consolidate 154 post offices”, significantly reducing operating costs and employment. Strategy is key; by shutting down the offices with the lowest production and necessity, USPS will no longer be uselessly spending money.
The Express mail industry in the United States had a volume of $16-17 billion on expedited shipments in the year 1996. In the years before shipment volumes has risen 15-20% per year. However due to higher competition prices have fallen which resulted in a rise of only 10-15% in total revenues. As an example of this stands the revenue and the operating margin of the biggest player that make up 45% of the market. Federal Express’ revenue has more than quadrupled in the ten years prior 1996, however its operating margin has more than halved. (Exhibit 2) The
From the beginning, the United States Constitution has guaranteed the American people civil liberties. These liberties have given citizens rights to speak, believe, and act freely. The Constitution grants citizens the courage to express their mind about something they believe is immoral or unjust. The question is, how far are citizens willing to extend the meanings of these liberties? Some people believe that American citizens take advantage of their civil liberties, harming those around them. On the contrary, many other people feel that civil liberties are necessary tools to fight for their Constitutional rights.
There is still a need for the United States Postal Service (USPS) today then just as anytime during the history of the United States. The USPS provides valuable and equitable services to all Americans everywhere in the United States, regardless of distance from their nearest post office. “Universal Service” a key term provided in an article by the Bloomberg Business week journal, describes what the USPS provides. The cost of delivering mail in rural communities is much higher than in urban areas. The USPS chief executive officer stated “You cannot charge 46 cents to deliver a letter by snowmobile in Alaska and make it work” (Bloomberg Business, 2014). Privatization of the USPS would possibly cause regional price differences that can place many Americans in rural areas at a
Narrow construction is not found in the Constitution, but the powers granted to Congress to regulate commerce are found. Exactly stated, "Congress shall have power to regulate commerce with foreign nations, and among the several States, and with the Indian tribes." This clause has no definite interpretation, but has included many aspects of regulating. The word "commerce" is defined as the exchange or buying and selling of commodities on a large scale involving transportation from place to place (Webster 264). Congress has exercised this delegated power in many cases. The nature and basic guidelines of Congress' power over commerce is first laid out in the case of Gibbons v. Ogden. In addition, the case United States v. Lopez is a
In Daniel Stone’s editorial article, “Flying Like an Eagle”, he advises the USPS some guidance to boost up their profit and their usage to the community. One of his inputs on the
The Post Office Department known as the United States Postal Services (USPS) (Annual Report, 2009) today, is a dominate player in the mail delivery arena and has been existence since 1776. The Post Office was originally a governmental agency, but due to mismanagement by Congress, was reorganized in 1971 and no longer a part of the presidential cabinet; but became an independent establishment of the executive branch of the Government. To date, the USPS maintains a monopoly on the day-to-day delivery of mail but competitors do share the market on some of the other types of deliveries; shares the market on some of the other types of deliveries (i.e. express
According to (SOURCE C), people are starting to migrate to the internet, and other cheaper mail options. As O’Keef says, they have experienced a 13 percent increase in mail volume in a fiscal year, more than any double previous decline, and lost 3.8 billion dollars. The USPS is anticipating even steeper drops in the years to come. According to (SOURCE E), the USPS is having a tough time, they are being battered by the high price of fuel. The USPS also takes a dig at our economy saying how it is responsible for their decrease in mail volume, calling the economy soft. The USPS is hit again in (SOURCE F), it states “not only are they losing revenue, they have been required to pay their own cost since 1970, which made a profit until 2006.” The decline in mail has caused major problems for the USPS, they delivered 17 percent fewer pieces in 2009 than in 2006, and lost $1.4 billion dollars. That money was borrowed from the U.S. Treasury. There is not that many alternatives for these issues, but there is one, that solution is in (SOURCE A), it simply states that they should not mess around with their delivery schedule. The USPS should be adding to their services, instead of subtracting from them. They dropped from a six-day service to a five-day service. As Richard Honack says- “to all
The Privatization of Royal Mail Maastricht University School of Business and Economics Maastricht, 5th April 2014 Wall, Sebastian (SW) ID numbers: I6029483 Course code: Group number: 1 Tutor’s name: Professor Hans van Mierlo Writing Assignment: Final Paper 1 Executive Summary
The Postal Service cannot continue to provide affordable, universal service to all areas of the country while maintaining mandated inflation-based prices without an increased ability to generate revenue and control costs. Therefore, bold changes to the business model are needed. All options – even those that have been dismissed in the past – need to be considered as part of the national discussion. In order to choose the best business model for the Postal Service, it is important first to establish the future role of the Postal Service and the mission the nation needs it to fill.
In 1787, the constitution was born. The constitution has been America’s guideline to the American way of life. Our US constitution has many points in it to protect America and it’s people from an overpowered government, our economy, and ourselves. The only thing the constitution doesn’t directly give us, is our right to privacy, and our right to privacy has been a big concern lately courtesy of the National Security Agency (NSA).(#7) Although our constitution doesn’t necessarily cover the privacy topic, it does suggest that privacy is a given right. Some people say that the right to privacy was so obvious, that our founding fathers didn’t even feel the need to make a point about it.(#9) It also didn’t help
The US express mail industry is highly consolidated. 85% of the market is served by 3 service providers. There are six second tier players who serve the remaining 15%. FedEx and UPS lead the industry in services and innovation. The following trends have been observed in this Industry.
The USPS is at a point where it does not have the financing available to maintain its operations. One reason for the annual net losses is due to the declining rate of first-class mail. The second reason has to do with the required prepayment of $5.5 billion per year toward retirees’ healthcare costs. In order for the USPS to overcome this deficit, they will need to consider their short time frame, government restrictions and labor union backfire in considering the best alternative. One alternative would be to privatize postal services operations which would allow the USPS to change its pricing structure, yet it would potentially significantly reduce market share. A second alternative would be to undergo a system-wide
USPS should consider shifting part of its mail volume to rail. By making this change it has been estimated that USPS could save at least $100 million per year. Additionally, “because of its lesser sensitivity to fuel price increases and greater control of its own infrastructure, rail transportation has major, long-term strategic advantages over highway” (Berman, 2012).
Team B has decided to do our paper on the United States Postal Service. The reason for this is that this service utilizes each of the functions such as globalization, the newest technology, the best innovations, and diversity and ethics combined all in one great service we each use on a daily basis in one way or another. During the reading of this paper, one will find that the following has been researched and discussed: the explanation of the four functions of management, also how the following factors affect the four functions of management: Globalization, Technology, Innovation, Diversity, and Ethics. As we look at these factors, we will learn how the Postal Service gets the mail from point