On May 14th
the U.S. Postal Service instituted its latest batch of rate hikes.
As everyone knows, the P.O. has never exactly been a profitable
endeavor, although in
fiscal year 2006 it managed to eke out a 1.2% gross profit.
After an adjustment for retirement costs, however, the gain becomes
a loss of 2.8%. Its balance sheet is pathetic, with a “current ratio”
of negative 5.6 (current assets $2.0 billion; current liabilities
$11.6 billion). This would indicate a company with dreadfully
serious problems in meeting its short-term obligations. The stock
of such a company on the NYSE would probably be good for use as
wallpaper, or as a component in the making of a papier-mâché
bust of Ben Bernanke.
It makes one
wonder why the government continues to keep this deficient monopoly
going. Perhaps the reason is that it gainfully employs 696,000 voters,
all of whom are beholden to the government for their incomes. The
average starting pay for Post Office jobs is currently being
advertised as $20.00/hour. “Postal Jobs Offer Full Federal Benefits,
Paid Training, Vacations. No Experience Necessary!” Not bad, eh?
But I digress…
let’s get back to the rate hikes. Mailing a one-ounce first-class
letter now costs 41 cents, a 5% increase, perhaps not so unbearable
— while additional ounces have been reduced to 17 cents per ounce
— sweet! There’s a rub, however. Large envelopes, or “flats,” now
cost 80 cents for the first ounce. First-class packages now cost
$1.13 for the first ounce. The latter two represent increases of
105% and 190%, respectively, which seem to fly in the face of official
pronouncements that inflation is under control.
To make matters
- A regular
letter over 3.5 ounces is considered a flat and must use that
that meet one or more of the “nonmachinable characteristics in
DMM 101.1.2″ are subject to a $0.17 “nonmachinable surcharge”
- Flats that
are “rigid, nonrectangular, or not uniformly thick” pay parcel
- If a package
is more than 13 ounces, you must use the Priority Mail rates and
not the first-class rates
- For “keys
and identification devices,” add $0.70 (Don’t ask me.)
- There are
several different Parcel Post rates — Local and Intra-BMC, Inter-BMC,
and Parcel Select (although I can’t seem to find definitions for
It’s all here,
in twenty confusing pages.
thought was “I think I’ll start using another company,” but of course
I realized pretty quickly (despite my incipient creeping senility)
that there is no other company to use, at least not for first-class
mail. So I, and everyone else, will just have to continue to patronize
the postal monopoly granted by the government to itself, and wonder
how much better things would be if mail delivery were provided by
the free marketplace. Perhaps we might see competition, innovation,
better service, and rate reductions instead of increases.
S. Fischer has worked in various fields.