Postal Service Is Nearing Default as Losses Mount - High-Def Digest Forums
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Old 09-07-2011, 05:25 PM
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Default Postal Service Is Nearing Default as Losses Mount

Postal Service Is Nearing Default as Losses Mount

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The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts
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http://www.nytimes.com/2011/09/05/bu...ef=todayspaper
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Old 09-07-2011, 05:38 PM
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Sad but other companies did them one better over several years. They had plenty of time to adjust. Now they will go the way of the dinosaurs.
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Old 09-07-2011, 05:56 PM
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Sad but other companies did them one better over several years. They had plenty of time to adjust. Now they will go the way of the dinosaurs.
So how will this affect Netflix and Blockbuster by mail OD programs?
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Old 09-07-2011, 06:07 PM
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Sad but other companies did them one better over several years. They had plenty of time to adjust. Now they will go the way of the dinosaurs.
USPS is not allowed to regulate itself as a regular business would. For one, they cannot fire anybody, at least not easily. That means that even though the mail volume is down, they have the same workforce costs. They also cannot raise rates as they wish, as UPS and FedEx can. Congress also can step in and deny changes, if they wish.

At the same time, the USPS receives no taxpayer money yet is regulated by the bureaucrats. It's the worst of both worlds...
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Old 09-07-2011, 06:24 PM
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So how will this affect Netflix and Blockbuster by mail OD programs?
Unless they can work out an affordable deal with a company like Fedex or UPS I'm not sure. Maybe that business will go extinct as well. Or we will see Netflix branded Kiosks. Not sure. Can't be good.
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Old 09-07-2011, 06:27 PM
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Originally Posted by Jables View Post
USPS is not allowed to regulate itself as a regular business would. For one, they cannot fire anybody, at least not easily. That means that even though the mail volume is down, they have the same workforce costs. They also cannot raise rates as they wish, as UPS and FedEx can. Congress also can step in and deny changes, if they wish.

At the same time, the USPS receives no taxpayer money yet is regulated by the bureaucrats. It's the worst of both worlds...
When I say they I mean government. Maybe they will get more bailout money from Obama?
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Old 09-07-2011, 06:52 PM
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When I say they I mean government. Maybe they will get more bailout money from Obama?
They'll have to. The USPS is one of the largest post offices in the world. It may be odd to say but they're to big to fail.
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Old 09-07-2011, 06:57 PM
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The postal service is not getting shut down.

It is a required infrastructure piece for both business and government.
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Old 09-07-2011, 07:01 PM
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The postal service is not getting shut down.

It is a required infrastructure piece for both business and government.
Correct - so Congress gives the USPS money, says OK to a rate hike - which both Netflix and BBi by mail pass on to their subs - and maybe OKs no more Satyrday delivery service.
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Old 09-07-2011, 07:03 PM
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I think I read 80% of their operating cost is labor. That 80% is only going to grow. Drastic changes need to be done, but there is no sense in bailing them out with billions of dollars, when we will have to revisit this situation again with another few billion in hand 15 years from now. Fuck that. I don't have a solution and haven't looked that much into their situation to really form a educated opinion on what they need to do, but just giving them a bailout for bailouts sake to keep them running for a few more years is surely not the answer.

It will certainly be interesting to see how netflix deals with the situation, but I was under the impression that blockbuster and gamefly did not secure deals on delivery like Netflix did. I thought gamefly went to court over it.
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