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A Postal Service Bail Out Coming?

This latest WSJ article about The Coming Postal Bailout [3] is yet another reminder of how poorly managed our nation’s postal service is. I find this absolutely astounding considering how many shipping companies, not to mention UPS and FedEx, continue to exist while our nation’s oldest has been essentially insolvent. The $15 billion line of credit the government extended to the USPS… that’ll run out at the end of the year and we’ll probably never see it again.

I don’t keep very close tabs on the USPS’s activity but the Postmaster General concedes there have been unprecedented volume declines since 2006 (that’s five years ago) and yet appears, publicly, to do very little about it. In fact, they recently negotiated an agreement with the American Postal Workers Union that would give them a 3.5% raise over 3 years (which isn’t that great, but still), cost of living wage hikes after 2012, and make it harder for the USPS to lay people off. That’s not exactly a lights out deal but you don’t continue to take cruise reservations on the Titanic after it has hit the iceberg.

The post office is run as if it has access to an unlimited bank account… mostly because it has access to an unlimited bank account. This year, they’ve lost $2.6 billion through the first two quarters of the fiscal year. Last year, they lost $8.5 billion over the course of the fiscal year. For fiscal year 2009, they lost $3.7 billion after a year in which they lost $2.8 billion. They project losses of $42 billion over the next four years. It’s mind boggling!

By comparison? UPS [4] and FedEx [5] have turned a profit each of those years.

It’s tragic. It’s so tragic that I feel like I’m taking crazy pills [6]… anyone else feel the same way? If you think you’re completely wrong, let me know!

(Photo: jstephenconn [7])