http://money.cnn.com/2013/02/08/news/economy/postal-service-finances/index.html
Continuing the discussion from two weeks ago regarding the USPS, Congress still continues to hamper the development and progress of the Postal Service. If it wasn't for a Congress mandated law that forces the USPS to fund healthcare benefits for future retirees, the USPS would have reaped a $100 million profit last year. However, the institution is losing billions of dollars every year in order to finance Congress' law and is continuing to borrow billions of dollars from American taxpayers. On the bright side, shipping volume increased by 4% during the 2012 holiday season, enough to hold the USPS over for the time being. Unfortunately, with definite financial troubles and Congressional payments ahead, the USPS is exhausting its resources into brainstorming ways to cut spending or secure more income. After blowing through a $15 billion loan from the U.S. treasury, the Postal Service has proposed putting an end to Saturday mail delivery. This is projected to save an estimated $2-3 billion every year, but may be hard to enact without Congressional support. The USPS is expected to possibly defer their debt payments for another year in order stay afloat. One question still looms, will the United States Postal Service be able to stay afloat without Congressional support for much longer, especially while deferring payments? Only time will tell.
Great blog post Mr. McMahon. I think it is a wonderful idea to get rid of Saturday deliveries in order to save so much money for their declining business. Although this is a good effort, it is not nearly enough to save the sinking ship that is the USPS. As many other businesses have died off, it will soon be the USPS whom undergoes structural unemployment, which is simply a shift in technological advancements that cause certain businesses/trades to end.
ReplyDeleteMr. McMahon I think Will Delorey wrote about the same thing last week. USPS is struggling to come up with a solution to solve the billions of dollars they are losing every year to congress' new laws. Although there has been an increase of 4% last year and earned 100$ million in profits it is hard to say that they are running a successful operation. They have to restructure employment and retirement benefits. I agree with John Powers that removing Saturday deliveries is a smart business move as it will cut down on USPS's overhead.
ReplyDeleteThe USPS problems are great indeed. Cutting Saturday shipping is only the first step in increasing revenue for the business. I agree with Matt and John that employment restructure is necessary for the company. Many other important money saving ideas will most certainly need to come in effect if the USPS is to stay afloat.
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