By American Postal Workers Union Executive Vice-President Greg Bell
(The following article will appear in the March-April 2012 edition of The American Postal Worker.)
In January, a group of “postal industry thought leaders” published a paper that advocates contracting out all postal functions except delivery — a plan that is often referred to as “the last mile strategy.”
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The paper, titled “Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership,” helps us understand what’s behind the current financial “crisis” at the Postal Service.
According to the model outlined in the proposal, “Today’s trusted letter carriers will deliver mail, packages, and products the ‘final mile’ to every address in the country while the private sector fulfills virtually all upstream mail processing, transportation and logistics functions.”
In coordination with the paper’s publication, the National Academy of Public Administration (NAPA), a congressionally chartered non-profit organization, announced that it is conducting an “independent” review of the proposal. Lest there be any confusion about its independence, the NAPA press release helpfully points out that the review is being funded by a contribution from Pitney Bowes.
The End Game
With the publication of this proposal, the end game of those who want to privatize the Postal Service has been laid bare for all to see. The USPS generates more than $65 billion a year in revenue. Privatization would redirect that revenue to private industry.
Who would benefit?
Pitney Bowes, the company that is funding the review, stands to be a major beneficiary. The company is widely known as a provider of mailing equipment, but it is also a major mail “pre-sorter.” The company takes advantage of generous pre-sort discounts offered by the Postal Service to provide outsourced services to high-volume mailers. In 2011, Pitney Bowes operated 41 mail processing facilities and generated $5.3 billion in revenue. Pitney Bowes would certainly snatch up a major portion of USPS revenue if it were given the chance.
A look at the paper’s authors reveals who else stands to gain from postal privatization. Among the authors are:
John Nolan, who served as Deputy Postmaster General of the USPS from 2000-2005. He is currently a board member for Streamlite, a business-to-consumer package delivery service. (Nolan is not the first former top-level USPS manager to go into the for-profit mail business. Former PMG Marvin Runyon left the Postal Service in 1992 and became a founding member of the Board of Directors of Stamps.com in 1996.)
Ed Gleiman, who was Chairman of the Postal Rate Commission from 1994-2001. After leaving the Postal Regulatory Commission, former chairman Ed Gleiman went on to become a lobbyist for the Direct Marketing Association (DMA), a leading trade organization representing large mailers.
The other authors are George Gould, who served as Legislative and Political Director for the National Association of Letter Carriers from 1988 to 2006, and Ed Hudgins, who is Director of Advocacy for the Atlas Society, a right-wing think tank.
Who Else Stands to Benefit?
FedEx and UPS also stand to benefit from any public-private model. FedEx is already the Postal Service’s number one private contractor, transporting Express Mail, Priority, and First Class Mail. In 2011 the company earned postal revenues of nearly $1.5 billion.
FedEx’s CEO, Frederick W. Smith, urged a congressional committee to consider postal privatization more than a decade ago. “Closing down the Postal Service,” he testified in 1999, “like any other government agency that has outlived its usefulness, is an option that ought to be considered seriously.”
Any postal study financed by those who stand to profit from privatization cannot be considered independent, neutral or credible.
The proposal doesn’t say what would happen to the Postal Service’s infrastructure of buildings and equipment, or to the 250,000 Clerks, Motor Vehicle Service employees, Maintenance Craft employees and Mail Handlers who currently process the nation’s mail. But it is clear that the profit derived by the private sector would come at the expense of the unionized workforce.
A Convenient Crisis
As anyone who’s been following the USPS knows, the major cause of the Postal Service’s current financial crisis — which is cited as the justification for privatization — is the Postal Accountability and Enhancement Act (PAEA). The 2006 law requires the Postal Service to pre-fund future retiree health benefits for the next 75 years within a 10-year period.
Right-wing, anti-union politicians, with help from top postal executives, have been using the crisis caused by the PAEA to pursue “reforms” that would undermine the USPS — closing thousands of post offices, shutting hundreds of mail processing centers, and slashing service to the American people. A bill introduced by Rep. Darrell Issa (R-CA) in the last session of Congress demanded $3 billion worth of cuts in postal retail and mail processing operations. It also would have created a “solvency authority” with the power to nullify postal employees’ collective bargaining agreements.
Privatization is the ultimate goal of those who are using the unsustainable mandates of the PAEA as an excuse to dismantle the USPS retail and mail processing network.
Public Bears the Costs
The public is already bearing the cost of the post office’s financial crisis. As mail processing plants are consolidated and hours at retails outlets are reduced, service to the American people is deteriorating.
Privatization would make things worse — much worse. It would transfer the assets of our nation’s public postal service to private corporations. It would take the wealth that we, as a nation, control, and hand it over to Pitney Bowes, FedEx, UPS and others.
It would mean an end to “universal service at a uniform price.” It would mean the death of inexpensive service to every neighborhood. It would mean more cutbacks in service and higher costs for postal customers.
This could be the disastrous outcome if Congress fails to fix the mess it made when it passed the PAEA.
What agency is going to have cameras in a private companies processing facility to be sure nobody is stealing from the mail?
oh jackie profit is good as long u dont mind paying 1.00 to mail a letter
When will the carrier “early out” be announced?? April??
I have a year left until I can retire, hopefully the government will not take away my pension. I have seen this coming since 2006 when congress passed the law about pre-funding health care, of course it was attached to another bill right before the holidays. The USPS was making money until this time, I DO NOT believe the 1st class mail is down, this is bull, we can’t trust our government, we can’t trust our employers, what is this world coming to. Someone saw a cash cow and is taking it. And what are they doing with the prefunding of health care, since the only persons they are hiring are part time with very little benefits. I work as a window clerk, and i certainly earn my money, we are so understaffed it’s not funny, I feel bad for our customers, I must work like a machine to keep up with the customers, I can’t wait to get the hell out of the Post Office
Ask about the APWU Officer Only Retirement fund that was paid for by your dues!
Just so the next company pay’s at the same rate for health and retirement benefits as the Postal Service does now,.[75 years down to 10 years to make payments].
the postal service should absorb fedex, ups, and pitney bowes.the dismanteling of an american treasure to wet the appetite of greedy priviteers is sickning it makes me want to vomit! these corprate raiders should be locked up with the banksters who brought our great nation to it knees with their greed ! the postal service is a finely tuned, well oiled machine,and even though its been under constant attack it still chugs along generating billions of dollars at no cost to the tax payers of our nation. what will our goverment be without the postal service ?the federal health care system would collapse, the tsp would collapse,when we need money to fund a war it wont be there !is time for a million mailman march?
Issahole is a piece of shet. That dirty worthless shetbag republican bastard Son of an Issahole.
What these privateers are proposing is terrible, and even if letter carriers are still employed, if they’re not part of the federal government, the unions will be dissolved, and retirement benefits for any employee who doesn’t retire before privatization strikes will be equally stolen by the acquiring company. I don’t think the Service will be privatized any time soon. It is still in the Constitution as a public service and that may make it hard for potential hostile parties to try to “buy” it. Plus, I think there are still enough people in Congress who would not approve of such a sale. Getting rid of Donohoe and other high level postal officials who are contributing to its problems and replacing them with more reasonable people would certainly help.
I don’t worry too much about my own retirement in four years, but I certainly don’t advise anybody who asks me about working for the USPS to do it. With new starting wages at $15.00 an hour, there are lots of other jobs out there that are comparable in pay and benefits, and chances are they’re better managed. They certainly can’t be any worse.
The USPS hierarchy is purposely running the Titanic aground. Donuthole, Goofy and Issahole are all in cahoots. Like letting the cat make decisions on the canary cage…PSE’s were the beginning of the end.
You people blaming the PAEA on the republicans are a bunch of tools. It couldn’t have passed without FULL democrat support. In fact two of the four sponsors were democrats.
Obama has called for five day delivery and his first term director of OMB Peter Orzag has called for privatization. He now is working for Citigroup.
You clowns are delusional.
Great idea. lets start with management. just incase by a long shot they are the PROBLEM.
For many of you this situation seems to be a complete surprise. The president the union leadership, all politicians and those vested in the mail business in the private sector, have the same goal in mind. Which is to use the USPS as a financial institution to fund any number of crusades they happen to be sponsoring. There are no loans to sign, no defaults, and best of all the general public does not care. The election of Obama was not the solution to the problems we face today. Our duty as postal employees is now to put our petty differences aside not matter the craft in order to understand and fight the coming storm. If any of us do not pay for our financial obligations in a timely manner the law will have no pity on our souls.
The main problem is the American Citizens,YOU!!!!! continue to vote and support “GREEDY and “CORRUPT” POLITICIANS to controll your lives financially,while fattening their vile lives with your hard work…..STOP!!!!!!!!! VOTING FOR THESE DEMONS!!!!!!.
the 2006 congress led by then congress woman collins and president bush saw the postal service making billions of dollars. their thouht was hey look another cash cow for us we can steal some more money and keep giving tax breaks to the so called job creators does this sound like whats happened to s.s. when its time to pay this money back to the people who earned it they cry out oh no you are going to raise our taxes. now or she was on the commitee to fix the postal service senator collins has some more great ideas none of them is giving back the money that was taken
This is a ‘Green’ game. $$$$$$$$$$ Billions of ‘um !
Jackie you’re somewhat of an idiot. Yes, if it comes to half privatize, the Post office will make money. But do you think that “profit” will go back into the business? Probably 5% and everything else goes into their pockets. Also we are the United States Postal Service, emphasize on “Service”. We are not a business, we are a “Service” for the people.
Oh….and “BRAD”….you conveniently FORGOT TO MENTION THE “COST” of mailing ANYTHING at the UPS Store.
Or….the INCONVENIENCE of having to GO TO THE “UPS STORE” in the first place….
Or the CONVENIENCE of having the USPS CARRIER, who comes to YOU EVERYDAY, drop off PRIORITY MAIL BOXES of any size or sort for you to FILL with WHATEVER, PRINT POSTAGE AND AN ADDRESS LABEL AT USPS.COM and take advantage of PRIORITY MAIL RATES that UPS or FedEx cannot match….
Only a WELL CONNECTED SMURF with three smart phones and a different suit for every day of the week and MONEY TO BURN would think that a “UPS STORE” could “replace” the USPS….
And, seeing that you apparently DON’T WORK HERE AT USPS, what in the world would UPS and FedEx do without
the USPS MANAGED “PARCEL DIRECT” that BIG BLUE AND BIG BROWN utilize for THEIR small parcel delivery product???
This is a RE-POST from elsewhere on the BLOG by myself:
Anyone who wants to take the time to read it, I have a LINK to the Conservative “THINK TANK” called the CATO Institute which SHO2WS CLEARLY WHAT THE CONSERVATIVE MOVEMENT WANTS TO DO WITH “Government” and it’s services:
http://www.downsizinggovernment.org/usps
MYOPIC folks like “red” can’t see that THE CORPORATE MONEY CLASS want to suck the AMERICAN WAGE EARNERS DRY, stripping their hard earned assets from them and to send this NEW FOUND “GOLD” to an off shore account where they can HIDE IT FROM THE US GOVERNMENT and all taxation. Welcome to the MEGA BUCKS BILLIONAIRE BOYZ KLUB permanent NEW ECONOMIC UNDERCLASS
And further:
The PMG and his legal department LAP DOGS are fully aware that they cannot drop ANY DAY of six day delivery unless the Congress passes legislation to ALLOW IT….this legal “end around” will not curry favor from anyone in the Senate, and will appeal to only House members who for years have been smacking their chops about PRIVATIZING most Government functions to their “PRIVATE SECTOR CORPORATE SLUM LORDS” who envision BIG DOLLARS IN THEIR LARDER by eliminating the current wage earners who hold these jobs right now….hiring LOW WAGE REPLACEMENTS WITH NO BENEFITS….and POCKETING THE LARGE CASH BONANZA that results from the VULTURE EVENT OF PICKING THE BONES CLEAN that Darrell Issa set in motion for his TeaPublican Party membership.
And the poor DUMMIES LIKE “Red”, who doesn’t like to work Saturdays, but is NOT BRIGHT ENOUGH to understand the BIGGER PICTURE HERE…. It’s NOT about SATURDAY DELIVERY….It’s about ELIMINATING WHAT THE GOP CALLS an “over paid, over benefited work force” under the GUISE OF SAVING MONEY IN THE FEDERAL BUDGET….
And a GULLIBLE NATION CANNOT SEE THAT THE USPS DOES NOT COST THE TAXPAYER A DIME OF TAX MONEY….
And the same dummies like “Red” will support this destruction of one of the most TRUSTED, DEPENDABLE AND UNIVERSALLY WELL REGARDED NATIONAL PUBLIC SERVICE….the United States Postal Service.
Ah Brad,if you only knew.
That fine demeanor of the clerk/postal employee behind the counter at the post office is dictated by the way they are treated an acted upon by postal manglement(management).
The UPS example you provide is a private company employee, whereas the postal employee is lead about by a micro-managed boss that is sitting in the district area office and could care less about the service the PO gives, as they think the PO will go on forever.
If the Saturday delivery is ended, that forever will be starting to end!
Privatizing the post office will reduce pay to the workers, increase pay to management and no cost control on prices customers pay. A friend who is a manager at UPS went to a class a few months ago and was told, When the Postal Service is privatized UPS would raise rates 20%. Companies keep telling us that they have to move their factories abroad to compete with low cost imports. We lose decent paying jobs in the U.S. but the prices of products from these former U.S. companies go up or at best stay the same. Chevy, Ford, Chrysler, Levis, Nike etc. Not one of these products has become less expensive. It is the same lies being feed to the public that privatizing the Post Office will keep rates down.
USPS Management is deliberately killing service by under staffing windows and cutting service. Also, way too much “dead weight” of those not actually moving the product.
Contract out everything but delivery makes CENTS.
UPS stores are franchised and provide excellent customer
service. Employees are customer oriented and repeat business is high. Employees and managers who cannot do the job are not tolerated as there are no union connections.
Once you shop a UPS store you will not go back to the post office to send a letter or parcel.
Proponents for privatization claim that the cost to consumers would be reduced by removing the mail service from government control. But market prices suggest otherwise.
Currently, a 46 cent stamp will get a letter from Houston to New York in two to three days. According to the FedEx website, two-day delivery of a similar letter to the same destination will cost between $20-30 dollars.
Now ask yourself this question,”Does the American Public want to pay $20-30 for first class delivery?” Answer….NO!
Currently, the US Postal Service delivers UPS and FED-X priority mail. WHY you ask!
They can not make money on it, so they ask USPS to deliver it for them.
NATIONAL SECURITY ISSUES….
After Hurricane Andrew and Katrina, the USPS was on the road delivering the mail.
FED-X and UPS was not!
After every major snow storm, the USPS is on the road delivering the mail.
After 9-11, the USPS was on the road delivering the mail.
FED-X and UPS was not!
do you think there will be any USPS future employees who will be entitled to retirement???? NOT
USPS is now hiring POSTAL SUPPORT EMPLOYEES, After 1 year and if they get hired back they can earn some vacation time, and get medical which offers very little, no sickdays, no pension.
So will there be any future retirees???
This 5 billion dollars the USPS is paying out who is going to get it?
The Historic Post Offices are being sold off to the highest bidder. Who is getting the money?
Where is Obama? Does he care about Our National Treasure the UNITED STATES POSTAL SERVICE? BUSH STARTED THIS MESS TO MAKE HIS FRIENDS RICH
AND TO TAKE AWAY 600,000 employees (BABY BOOMERS) who are retired or about to retire benefits which are protected under the Federal Gov’t
THE USPS is the BEST WORKING PART OF THE FEDERAL GOV’T.
Where is Obama? with one stroke of the pen he can fix this mess!
When Bush was in office he helped pass that law that the Postal Service had to pay for the retires health benefits. This is what is killing them. These Republicans are so so horrible. I hate them all as i am an union worker.
Jackie (above) cannot even write a literate sentence. Listen to her, or other ideologues? No thanks. Like all the former USPS management people advising the privatization, they are also low IQ and/or profiteering from their government ‘service’, or political ideological hacks.
Privatization is 100% provide better services to American, it makes profit, problems solved!
The reason Postal Service is sinking is because of the Postal deform legislation that was passed in 2006, the Destruction and Dismantlement Act(the Postal Accountability and Enhancement Act) I see that management still receives big boosts in pay/.And they even have an executives only gym. What pigs they are. The maggots also want to take control of our retirement and health care. We must march in Washington D.C. Fight them now/.