Losing money...A Ponzi Scheme Posted on 09/07/2013 by Burrus Did you know that the Postal Service grants rate discounts in the staggering amount of $14 to $18 billion per year? That’s right, $14 to $18 billion every year. Recently, in response to a question by a Congressman the postmaster general gave this unbelievable number. It is unacceptable that he did not have an exact number with a range of four billion dollars, but rate discounts have become such an integral part of subsidizing commercial businesses that he could only provide an estimate. You have heard repeated announcements about the five billion dollar annual future health care payment but not one word about this $14 billion subsidy. The law requires that rates must be uniform but large mailers have been successful in reducing postage under the phony excuse of performing mailing preparation activities. There is no sortation or transportation functions that mailers can perform at USPS’ costs, yet rates are reduced in this staggering amount, reducing postage for large mailers only. Average citizens mailing a house payment or a note to a loved one does not enjoy rate discounts and must pay the full rate, notwithstanding the mail preparation performed. But large mailers have corrupted the rate process to the extent that they are now creating their own rates totally divorced from the costs of operating a national system. To add insult to injury, following receipt of nearly four billion dollars in savings from the APWU contract, the Postal Service defended in court the practice of setting discounts in excess of the USPS’ costs. They were willing to set discounts at a rate greater than postal costs and had the nerve to defend the illogical position in court. The courts rejected the USPS’ defense and limited discounts to the cost avoided, but even this standard is beyond belief for a company experiencing financial difficulties. There is no mailing activity performed by large mailers that cannot be performed cheaper by the Postal Service. A process that began in the 1970s to supplement an overwhelmed postal network has been made unnecessary by postal automation and now the Postal Service has over capacity while they continue the unnecessary subsidy. The massive consolidations of Plants that have been implemented are evidence that the justification for discounts no longer exists. As mail is continuing to be affected by electronic transmission it is inexcusable for the Postal Service to continue the illogical subsidies to large mailers. No other postal system in the world incorporates discounts into its rate system resulting in US postage being the cheapest in the world by a factor of more than one half. A letter that requires first class postage of 46 cents, if converted to Standard mail can be sent from Maine to California for less than 12 cents. The Associations representing the large mailers are beginning a campaign to oppose the expected rate increase, flush off their victory opposing the previous proposed exigent increase. They will demand that the Postal Service further reduce costs, principally employee wages and benefits. Postal management can be expected to bow to their demands while continuing the excessive subsidies through rate discounts. While much focus has been made on the onerous requirement to prefund future health costs, the giant obstacle to a financially secure Postal Service is rate discounts. Collect the $14 to $18 billion that is forgiven through the phony cost avoided scheme and the Postal Service would be financially secure. The United States Postal Service would be financially sound if they eliminated rate discounts and set all rates uniformly. There is no justification for single piece first class mailers to continue subsidizing large mailers. This is the biggest rip off in the civilized world and the postal labor unions cannot be expected to make their hard working employees pawns in this Ponzi scheme. This entry was posted in Postal News. Bookmark the permalink.
Posted on: Tue, 10 Sep 2013 09:01:10 +0000
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