Amazon to Begin Sunday Deliveries, With Post Office's Help(online.wsj.com)
online.wsj.com
Amazon to Begin Sunday Deliveries, With Post Office's Help
http://online.wsj.com/news/article_email/SB10001424052702304868404579190091121691258-lMyQjAxMTAzMDEwMDExNDAyWj
16 comments
So where does the $6B loss come from? It turns out that the overwhelming chunk of USPS expenses are due to a 2006 Congressional mandate that forces the agency to prepay for 75 years of benefits.
So do all private sector businesses. You can't promise employees $X in future benefits without putting $X into a pension fund. This requirement is uncommon in government, which is why many municipalities have unfunded pension obligations, but it's completely reasonable. The scary fact is that we only require the USPS to do this.
You are also misrepresenting the 75 year time horizon. The USPS is required to make the following (wildly oversimplified) spreadsheet:
The number "earned costs/employee" is the fraction of the pension costs that have already vested. I.e., if the employee has earned a pension of $100/month so far, but will have earned a pension of $5000/month at retirement, their earned costs are $100/month, not $5000/month.
This is the same calculation that ERISA requires of all private sector companies.
(Certain grandfathered companies in the private sector are also allowed to escape ERISA, and this will be a problem if any of them go out of business.)
So do all private sector businesses. You can't promise employees $X in future benefits without putting $X into a pension fund. This requirement is uncommon in government, which is why many municipalities have unfunded pension obligations, but it's completely reasonable. The scary fact is that we only require the USPS to do this.
You are also misrepresenting the 75 year time horizon. The USPS is required to make the following (wildly oversimplified) spreadsheet:
year #living employees # earned costs/employee
2014 1000000 50000
2015 900000 51000
etc
The number "earned costs/employee" is the fraction of the pension costs that have already vested. I.e., if the employee has earned a pension of $100/month so far, but will have earned a pension of $5000/month at retirement, their earned costs are $100/month, not $5000/month.
This is the same calculation that ERISA requires of all private sector companies.
(Certain grandfathered companies in the private sector are also allowed to escape ERISA, and this will be a problem if any of them go out of business.)
"This is the same calculation that ERISA requires of all private sector companies."
Not quite. It should be "all private sector companies that offer pensions." That's only about 18% of private employers as of 2012. See http://www.bls.gov/opub/mlr/2012/12/art1full.pdf
Not quite. It should be "all private sector companies that offer pensions." That's only about 18% of private employers as of 2012. See http://www.bls.gov/opub/mlr/2012/12/art1full.pdf
Even private sector companies with defined contribution plans need to do this calculation. It's just trivially easy for them - the calculation amounts to "did the bank transfer into the 401k happen on schedule?"
Good point!
My memory from previously looking at this is that you're completely right. But if so, news coverage like that WaPo article are egregiously intellectually dishonest (even if they don't technically lie).
Is there a counter-argument to what you've written that smart people on the other side will offer even if it's not convincing? The only one I could imagine is "The federal government has a special economic status so it doesn't need to fund the future costs it commits to, a la social security". But that's pretty weak.
Is there a counter-argument to what you've written that smart people on the other side will offer even if it's not convincing? The only one I could imagine is "The federal government has a special economic status so it doesn't need to fund the future costs it commits to, a la social security". But that's pretty weak.
I don't know of a good argument against applying ERISA to the government. Nor do I know a good argument against fixing all the various ERISA loopholes (e.g., certain private sector post-retirement health care benefits are excluded from ERISA). But I'd also love to hear one.
As for the "egregiously intellectually dishonest" WaPo, I'd simply point out that most reporters are innumerate. Full stop. If you give them an explanation like what I just did, their eyes glaze over and they either parrot what I just said (if their intuition/opinions agree with it) or go find an opposing expert (if they dislike my conclusion). For other examples of this, go read financial crisis reporting - "an evil vampire squid just ate a black swan and then pooped toxic waste onto innocent homeowners."
As for the "egregiously intellectually dishonest" WaPo, I'd simply point out that most reporters are innumerate. Full stop. If you give them an explanation like what I just did, their eyes glaze over and they either parrot what I just said (if their intuition/opinions agree with it) or go find an opposing expert (if they dislike my conclusion). For other examples of this, go read financial crisis reporting - "an evil vampire squid just ate a black swan and then pooped toxic waste onto innocent homeowners."
The Problem isn't the prefunding, it's the suddenly being expected to prefund for half a million employees in 10 years. A private company accrues those costs one employee at a time over several decades.
There is the question of whether, in 2017 once this has been sorted out, what (if anything) they'll change to remain profitable with the increased employee costs going forward but they were quite profitable before this happened so I don't see too much of an issue.
Although the federal government DOES HAVE special economic status so I'm not sure how you think that's particularly weak unless you think reality is pretty weak.
There is the question of whether, in 2017 once this has been sorted out, what (if anything) they'll change to remain profitable with the increased employee costs going forward but they were quite profitable before this happened so I don't see too much of an issue.
Although the federal government DOES HAVE special economic status so I'm not sure how you think that's particularly weak unless you think reality is pretty weak.
The weakness comes not from the unreality of the special economic status, but from the improbability that that status actually changes whether it's a good idea.
The USPS was not actually profitable. They simply seemed profitable because they were hiding the cost of retirement benefits. Forcing them to prefund is nothing more than forcing them to acknowledge the debts they already accrued. If that tips them into the red, they were not profitable before. They were simply pretending to be profitable via accounting tricks.
$100 in revenue - $75 in costs - $50 in off balance sheet debt is not profitable.
The special economic status of the federal government simply means that the taxpayer is on the hook for the USPS's hidden debts. No one disputes this. What's under dispute is whether the USPS should be allowed to incur hidden debts on behalf of the federal government (PAYGO accounting), or whether their debt should be transparently included in the federal debt (ERISA accounting).
$100 in revenue - $75 in costs - $50 in off balance sheet debt is not profitable.
The special economic status of the federal government simply means that the taxpayer is on the hook for the USPS's hidden debts. No one disputes this. What's under dispute is whether the USPS should be allowed to incur hidden debts on behalf of the federal government (PAYGO accounting), or whether their debt should be transparently included in the federal debt (ERISA accounting).
If anything, it's the change from not-funding to pre-funding. It's not new money that has to be conjured from thin air, it's money that is already owed.
USPS is NOT put in a worse situation than private companies. It had a privilege that put it in a much, much better situation revoked.
The fact that future governments can (probably) be relied on to make good on promises made today is a "weak argument" for just kicking the can down the road instead of funding the liability immediately.
In 2017, USPS's costs will go down, significantly, because they no longer have the backlog of pensions to fund, they will just to funding pensions on an ongoing bases. Exactly like private companies. At that time, USPS will be in a situation where it can be reformed, because it no longer carries around a glut of unfunded liabilities that will be dumped in the government's lap if something goes belly up.
USPS is NOT put in a worse situation than private companies. It had a privilege that put it in a much, much better situation revoked.
The fact that future governments can (probably) be relied on to make good on promises made today is a "weak argument" for just kicking the can down the road instead of funding the liability immediately.
In 2017, USPS's costs will go down, significantly, because they no longer have the backlog of pensions to fund, they will just to funding pensions on an ongoing bases. Exactly like private companies. At that time, USPS will be in a situation where it can be reformed, because it no longer carries around a glut of unfunded liabilities that will be dumped in the government's lap if something goes belly up.
Nope, not even close. GM for example has a lot of unfunded pension obligations. Which is one of the reasons for the auto bailout if the US auto industry failed a lot of pensioners would see a huge drop in there monthly pension checks.
Above and beyond that companies set aside money each year for each working employee which is supposed to cover the majority of there pension they don't need to set asside the full cost on day one like the USPS.
Above and beyond that companies set aside money each year for each working employee which is supposed to cover the majority of there pension they don't need to set asside the full cost on day one like the USPS.
How is my post wrong? From my post: (Certain grandfathered companies in the private sector are also allowed to escape ERISA, and this will be a problem if any of them go out of business.)
You are simply incorrect that the USPS needs to pay for an employee's pension on day one. They contribute according to a vesting schedule, same as any private sector company not grandfathered.
It's only in their projections that they must include full costs. Unlike many other agencies, the USPS can't tell Congress that a program will cost $X over the next 10 years, where $X excludes the cost of employee pensions.
You are simply incorrect that the USPS needs to pay for an employee's pension on day one. They contribute according to a vesting schedule, same as any private sector company not grandfathered.
It's only in their projections that they must include full costs. Unlike many other agencies, the USPS can't tell Congress that a program will cost $X over the next 10 years, where $X excludes the cost of employee pensions.
You are wrong because the USPS is required to fully pre-fund all of its pension obligations. It does not pre-fund based on a vesting schedule, it must prefund each obligation all at once. That is why the prefunding obligation is always brought up when discussing the USPS's finances--it is a unique requirement that is not shared by any other entity, public or private.
You are probably misunderstanding the pre-funding schedule. Beginning in 2006, the USPS was obligated to make pre-funding payments with the goal of fully pre-funding 75 years worth of pensions by 2017. See the linked WaPo article, which explicitly states "Congress passed a statute in 2006 requiring the early payment of 75 years worth of retiree benefits within 10 years. " (This is not the same as vesting, because the pre-funding obligation is not tied to the vesting of any particular group of beneficiaries' benefits.)
More specifically, see section 801, et. al., for the specific language of the Postal Accountability and Enhancement Act fo 2006 which creates the silly requirement.
You are probably misunderstanding the pre-funding schedule. Beginning in 2006, the USPS was obligated to make pre-funding payments with the goal of fully pre-funding 75 years worth of pensions by 2017. See the linked WaPo article, which explicitly states "Congress passed a statute in 2006 requiring the early payment of 75 years worth of retiree benefits within 10 years. " (This is not the same as vesting, because the pre-funding obligation is not tied to the vesting of any particular group of beneficiaries' benefits.)
More specifically, see section 801, et. al., for the specific language of the Postal Accountability and Enhancement Act fo 2006 which creates the silly requirement.
I don't care what some innumerate reporter at the WaPo wrote.
According to the actual law, what must be fully funded is the "actuarial present value of all future benefits payable from the Fund." What this means is that if an employee's pension has 50% vested, their "future benefits payable from the Fund" are 50% of their pension. The USPS is then obligated to put 50% of the NPV of their pension into the fund by 2017.
https://www.govtrack.us/congress/bills/109/hr6407/text
It's explicitly stated 5 times it should comport with "generally accepted actuarial practices and principles", which rules out all the insanity people seem to be attributing to this law.
According to the actual law, what must be fully funded is the "actuarial present value of all future benefits payable from the Fund." What this means is that if an employee's pension has 50% vested, their "future benefits payable from the Fund" are 50% of their pension. The USPS is then obligated to put 50% of the NPV of their pension into the fund by 2017.
https://www.govtrack.us/congress/bills/109/hr6407/text
It's explicitly stated 5 times it should comport with "generally accepted actuarial practices and principles", which rules out all the insanity people seem to be attributing to this law.
Yes, I know what the text of the bill states, which is why I referenced it in earlier comments. More importantly, you yourself have posted the relevant language. The "acturial present value" part of the quoted phrase is what must comport with generally accepted actuarial practices. The problem is that "all future benefits payable" is by its express language not limited to vested benefits. You need to read the entire code section, not just little snippets.
I'm very much enjoying this discussion and I hope you guys can find a definitive statement about what the bill entails. (I find the language you have both quoted from the bill to be too vague to my uncertified ear to make a decision.)
Is your claim that the postal service must pre-fund unvested benefits at the day the employee is hired? That is, is that how you think "future benefits payable" is being interpretted? Because what's definitely not true is that the postal service is being required to fund un-hired (or unborn) employees. See this article, which has quotes from the Congressional Research Service.
http://www.cnbc.com/id/45018432
Is your claim that the postal service must pre-fund unvested benefits at the day the employee is hired? That is, is that how you think "future benefits payable" is being interpretted? Because what's definitely not true is that the postal service is being required to fund un-hired (or unborn) employees. See this article, which has quotes from the Congressional Research Service.
http://www.cnbc.com/id/45018432
Plans may be underfunded if fully funding the plan represents a major threat to the business. The net effect of which is plans can easily become significantly underfunded without being grandfathered in.
(c) Variance from minimum funding standards (1) Waiver in case of business hardship (A) In general If— (i) an employer is (or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan are) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan), and (ii) application of the standard would be adverse to the interests of plan participants in the aggregate, the Secretary of the Treasury may, subject to subparagraph (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.
(c) Variance from minimum funding standards (1) Waiver in case of business hardship (A) In general If— (i) an employer is (or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan are) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan), and (ii) application of the standard would be adverse to the interests of plan participants in the aggregate, the Secretary of the Treasury may, subject to subparagraph (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.
>> Which is one of the reasons for the auto bailout if the US auto industry failed a lot of pensioners would see a huge drop in there monthly pension checks
Most of them already have.
Most of them already have.
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It should be noted that post-ERISA, the preferred alternative to promising $X in future benefits without putting $X into a fund is to put in $X, but then get the money back on the backend when some private equity company takes the company through bankruptcy to reduce its pension liabilities. Private sector pension plans are overall in much better shape than public sector ones, but that's not saying all that much.
No organization fully funds a pension 75 years out.
Google the definition of "fully funded". Any organization complying with ERISA is funding a pension not only for 75 years, but for 75 billion years.
Only defined contribution pension plans are required to be fully funded...because of the nature of the pension (the plan guarantees the amount input but not the benefits available when the worker retires). A defined benefit plan can be fully funded, but ERISA does not require this--indeed, few defined-benefit pension plans, public or private, are fully funded. Moreover, fully funded in this context only refers to the funding of vested benefits. The USPS is required to pre-fund all benefits for current and past employees, even those benefits which have not yet vested.
Also, please note that in other posts you are conflating 401-k contributions with pension contributions. They are not even remotely the same thing.
Also, please note that in other posts you are conflating 401-k contributions with pension contributions. They are not even remotely the same thing.
I'll just pretend I don't know about the dozens of times pensions were withdrawn by big corporations because they can. Just Google "pensions gone" or similar queries, if you're really that clueless.
After reading through the entire thread, I can see where your misunderstanding arises.
You are referring only to the payment of vested pension benefits. In this regard, you are correct--ERISA generally requires companies to fully fund vested pension benefits. Pension plan payments for vested benefits are not "pre-funding payments" since the liability has already accrued. A "pre-funding payment" would be a payment for pension benefits for which the liability has not yet arisen, i.e., for unvested pension benefits.
That is what is significant about the USPS--it is required to pre-fund its pension liabilities for its current and past employees, including for those benefits that have not yet vested and which would, absent the specific Congressional mandate not be required to be funded under ERISA.
The USPS is not required to prefund pensions for employees it hasn't hired yet, but you're the only one on the thread arguing that.
You are referring only to the payment of vested pension benefits. In this regard, you are correct--ERISA generally requires companies to fully fund vested pension benefits. Pension plan payments for vested benefits are not "pre-funding payments" since the liability has already accrued. A "pre-funding payment" would be a payment for pension benefits for which the liability has not yet arisen, i.e., for unvested pension benefits.
That is what is significant about the USPS--it is required to pre-fund its pension liabilities for its current and past employees, including for those benefits that have not yet vested and which would, absent the specific Congressional mandate not be required to be funded under ERISA.
The USPS is not required to prefund pensions for employees it hasn't hired yet, but you're the only one on the thread arguing that.
Here is the law. What portion of the law requires them to pay for benefits which have not vested?
https://www.govtrack.us/congress/bills/109/hr6407/text
Your interpretation is certainly not "in accordance with generally accepted actuarial practices and principles" as the law demands.
https://www.govtrack.us/congress/bills/109/hr6407/text
Your interpretation is certainly not "in accordance with generally accepted actuarial practices and principles" as the law demands.
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This is not true. The USPS loses billions every year before pre-funding. However, pre-funding pushes them against their statutory debt limit.
You can see in their annual report that they expect losses of up to $20 billion annually even after 2017 (when pre-funding catchup ends) and their plan to eliminate pre-funding would only save about $8 billion per year -- and do nothing to address that the USPS will not be able to pay pensions since they lose so much money.
I urge you to read primary sources. The USPS' annual report is an easy-to-understand slide deck that explains everything very well. http://about.usps.com/strategic-planning/five-year-business-... Please read it before the next time you say something about this issue.
You can see in their annual report that they expect losses of up to $20 billion annually even after 2017 (when pre-funding catchup ends) and their plan to eliminate pre-funding would only save about $8 billion per year -- and do nothing to address that the USPS will not be able to pay pensions since they lose so much money.
I urge you to read primary sources. The USPS' annual report is an easy-to-understand slide deck that explains everything very well. http://about.usps.com/strategic-planning/five-year-business-... Please read it before the next time you say something about this issue.
I leafed through the 37 pages. If I understand correctly, the losses are projected only if they don't partake in some initiatives. If they actually follow their plans and mail volume is in the upper 2 (of 4) projections, they make money.
Correct. I wasn't saying that they have to be unprofitable going forward, just that the pre-funding doesn't entirely explain the losses.
I think it's a sensible document and it shows the USPS understands their situation and is willing to remain solvent in a humane and useful way.
I think it's a sensible document and it shows the USPS understands their situation and is willing to remain solvent in a humane and useful way.
But the pre-funding, which what I can determine, is rare both in public and private sector, brings them from profit to loss.
The USPS pension obligations are around 100% funded (has been overfunded at 105% in the past; may still be the case.)
The average private company funds its pensions at about 80%. It's supposed to be a complete funding when interest rate of investments is factored and the average used to be about 90%. There are (questionable) accounting tricks that private companies can use to underfund pensions that are not available to the USPS because of the way their Congressional mandate is written, and because of the enormous amount of public scrutiny.
So, to bring the USPS in line with what is required of the pensions of private companies, they would reduce their obligations by 10-20% at most. They would still have the same problems.
Public pensions don't have funding requirements. This is a disaster for millions of workers since they won't get their pensions. It's not a good idea to rely on perpetually increasing government revenue without any kind of savings in reserve.
That said, eventually, the USPS will need to reduce pension payments in order to survive if their other initiatives fail, or they will have to obtain direct funding from Congress. If they are required to pre-fund to the end, then retirees will benefit at the expense of current employees. If they are allowed to drop pre-funding and move to the public pension model, then retirees will suffer for the benefit of current employees.
The average private company funds its pensions at about 80%. It's supposed to be a complete funding when interest rate of investments is factored and the average used to be about 90%. There are (questionable) accounting tricks that private companies can use to underfund pensions that are not available to the USPS because of the way their Congressional mandate is written, and because of the enormous amount of public scrutiny.
So, to bring the USPS in line with what is required of the pensions of private companies, they would reduce their obligations by 10-20% at most. They would still have the same problems.
Public pensions don't have funding requirements. This is a disaster for millions of workers since they won't get their pensions. It's not a good idea to rely on perpetually increasing government revenue without any kind of savings in reserve.
That said, eventually, the USPS will need to reduce pension payments in order to survive if their other initiatives fail, or they will have to obtain direct funding from Congress. If they are required to pre-fund to the end, then retirees will benefit at the expense of current employees. If they are allowed to drop pre-funding and move to the public pension model, then retirees will suffer for the benefit of current employees.
But we're talking about health care, not pensions (similar but different).
Even so, the bill seems designed to make them fail.
Untrue.
Even if you took away the requirement to fund their retirement/pensions the Post Office would have lost nearly five billion dollars last year.
The pension funding is a common misdirection that is brought up far too often in discussions about the Post Office.
The USPS problems are
1) Congress, how many "corporations" have 535+ people to tell them how to run their operation. Congress routinely prevents the closing of obsolete Post Offices and Sorting facilities. 2) People simply do not use mail, dropping more than a third of the letters shipped in the last six years 3) Businesses are also dropping the amount of mailings made.
In 2006, the unfunded liability of the USPS was nearly 75 billion dollars. Who should be funding it? Certainly not the public. The law requires the USPS to put aside 5 to 6 billion a year. The issue that came up was, mail use plummeted.
Even if you took away the requirement to fund their retirement/pensions the Post Office would have lost nearly five billion dollars last year.
The pension funding is a common misdirection that is brought up far too often in discussions about the Post Office.
The USPS problems are
1) Congress, how many "corporations" have 535+ people to tell them how to run their operation. Congress routinely prevents the closing of obsolete Post Offices and Sorting facilities. 2) People simply do not use mail, dropping more than a third of the letters shipped in the last six years 3) Businesses are also dropping the amount of mailings made.
In 2006, the unfunded liability of the USPS was nearly 75 billion dollars. Who should be funding it? Certainly not the public. The law requires the USPS to put aside 5 to 6 billion a year. The issue that came up was, mail use plummeted.
When I first heard about the absurd benefits-prepayment scheme, I could swear I read that even USPS employees were against it because they knew what repercussions it would have. I don't have a citation for that unfortunately.
The older ones may have been, because they would have reaped the benefits. But sooner or later, when the taxpayers would have started getting hit with astronomical bills for keeping USPS retirees alive, someone would have had to pay the price.
See Detroit's pension retirees. The older retirees took advantage of the nice pension, and now the younger retirees are going to have to have their benefits cut because there is no one left for Detroit to tax.
See Detroit's pension retirees. The older retirees took advantage of the nice pension, and now the younger retirees are going to have to have their benefits cut because there is no one left for Detroit to tax.
As they say lies,lies, statistics and pension scheme forecasts :-)
I had an off the record briefing about Hermes (the uk's largest pension fund) for some reason the government makes pension funds appear to have major short falls by assuming that magically all the members will suddenly start drawing their benefits all at once.
On more reasonable forecasts the scheme was sightly under on more positive estimation it was actually in surplus.
Cynics might think that FS pensions are being made artificially expensive to allow employers to kill of the schemes.
I had an off the record briefing about Hermes (the uk's largest pension fund) for some reason the government makes pension funds appear to have major short falls by assuming that magically all the members will suddenly start drawing their benefits all at once.
On more reasonable forecasts the scheme was sightly under on more positive estimation it was actually in surplus.
Cynics might think that FS pensions are being made artificially expensive to allow employers to kill of the schemes.
Actually, at least in the US, it's the opposite. The US government requires private organizations to abide by strict funding standards to ensure their retirees get their promised benefits, via laws like ERISA and PPA of 2006.
On the other hand, government entities don't have to abide by ANY laws regarding funding for future benefits, so the politicians and union leaders/elders promise higher and better benefits to get the votes, while taxpayers get shafted when the bill comes due. It's ridiculous to promise full retiree healthcare (even the US government doesn't offer it to its citizens). That is why when Congress required USPS to prefund the benefits, it became an issue for their budget. Because when benefits actually get accounted for, and you start setting money aside, you realize how stupid it is to offer someone full retiree medical benefits.
On the other hand, government entities don't have to abide by ANY laws regarding funding for future benefits, so the politicians and union leaders/elders promise higher and better benefits to get the votes, while taxpayers get shafted when the bill comes due. It's ridiculous to promise full retiree healthcare (even the US government doesn't offer it to its citizens). That is why when Congress required USPS to prefund the benefits, it became an issue for their budget. Because when benefits actually get accounted for, and you start setting money aside, you realize how stupid it is to offer someone full retiree medical benefits.
What's the alternative to offering low paid workers full retiree medical benefits? A bunch of bankrupt and sick and dying pensioners?
Alternative for who? For USPS, the alternative is to have a chance at a sustainable business without being subject to wildly volatile and exponentially increasing healthcare costs that could quite literally bring the whole business down. For America, the alternative is to decide, as a country, that everyone is entitled to a certain amount of healthcare. Otherwise, the alternative is whatever happens to Taco Bell and Wal Mart workers.
Ah yes but are the strict funding requirements fiddled or not?
Pay as you go can work for core civil service jobs - its just that it makes it hard to privatize the jobs.
I trust congress and the house also required pre funding of their benefits :-)
Pay as you go can work for core civil service jobs - its just that it makes it hard to privatize the jobs.
I trust congress and the house also required pre funding of their benefits :-)
USPS is also one of the largest spam operations, and if it filtered out spam they would be much worse off.
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> "Delivery on a Sunday would be very compelling for consumers. There are certainly people who decide not to make an order on a Friday because it won't get there until Monday,"
I am definitely one of those people. It seems like I always end up remembering to order something late Thursday night or Friday. When using my Prime membership's 2 day shipping on a friday, the package does not arrive until Tuesday. Is this ever going to change?
What exactly is the reason these shipping companies seem to go into a kind of hibernation over the weekend? Surely there are people out there who would be willing to work weekends (if the pay was right)? How much more would it cost them?
I am definitely one of those people. It seems like I always end up remembering to order something late Thursday night or Friday. When using my Prime membership's 2 day shipping on a friday, the package does not arrive until Tuesday. Is this ever going to change?
What exactly is the reason these shipping companies seem to go into a kind of hibernation over the weekend? Surely there are people out there who would be willing to work weekends (if the pay was right)? How much more would it cost them?
If we allow shipping companies to work on sundays, we should also allow some warehouse employees to work on sundays. Now all these companies will need electricians and mechanics that work on the weekend to fix stuff that breaks on weekends, because else they would have to wait until monday to continue working. These technicians will need to get their spare parts somewhere, so their distributors need to work on the weekend too. With so many people working on the weekend, it'll be necessary for typical white collar workers to work on the weekend, because a business owner doesn't want to wait until Monday for his accountant to do the paperwork for his new weekend employees. At some point the IT system of a shipping company, or a warehouse, or an accountant will fail on a sunday, and then some HN reader will have to go to work on sunday and miss the delivery of some parcel they ordered and they will have to wait until monday anyway.
I noticed you're from Austria. If the rules in Austria are like I understand them to be in Germany, you're actually not allowed to work on Sunday. There are no laws against that the the US. Most stores are already open on Sunday, and plenty of people work.
That chain of events is a bit questionable since there are already enough people working on Sundays. Hospitals, Restaurants, Police, ...
Yes, and all these things already require a lot of people to work on the weekend. Blood transfusions are delivered on weekends just fine. But that's no reason to allow consumer electronics to be delivered on Sunday...
So people who work in retail stores open on the weekends work 56 hour weeks rather than 40 hour weeks?
I feel really bad for the people working in the drugstore now!
Just to be clear, the idea that weekly cyclicality in demand for labor, or any restriction on demand for labor hurts employee welfare makes little sense when the legislative efforts already focus on labor friendly restrictions on supply. In fact, one of the ways that unions served their members was by insisting that outmoded positions (eg. coal shoveler on a diesel-electric train) were still filled.
In general, labor interests are served when employers need more work done, and the supply of labor is constrained through things like limits to how many hours can be worked in a stretch without a break and when overtime pay is required. (I say in general, because everyone is also a consumer, so efficiency and productivity gains are not a net loss, they're a net gain)
I feel really bad for the people working in the drugstore now!
Just to be clear, the idea that weekly cyclicality in demand for labor, or any restriction on demand for labor hurts employee welfare makes little sense when the legislative efforts already focus on labor friendly restrictions on supply. In fact, one of the ways that unions served their members was by insisting that outmoded positions (eg. coal shoveler on a diesel-electric train) were still filled.
In general, labor interests are served when employers need more work done, and the supply of labor is constrained through things like limits to how many hours can be worked in a stretch without a break and when overtime pay is required. (I say in general, because everyone is also a consumer, so efficiency and productivity gains are not a net loss, they're a net gain)
"People willing to pay for it" sounds like a reason
That HN reader will probably take Mondays off.
The real question is: Will this will just create more jobs in the end? I am not sure though. Because, it will make life even harder for B&M stores. I already use only the local hardware store, and the bicycle shop as far as the local retail stores go. Even then the nearest bicycle shop closed last summer after many years of service.
The real question is: Will this will just create more jobs in the end? I am not sure though. Because, it will make life even harder for B&M stores. I already use only the local hardware store, and the bicycle shop as far as the local retail stores go. Even then the nearest bicycle shop closed last summer after many years of service.
Actually I thought of the same thing when I read the article. These expectations are what making Japanese working environments so insane like unpaid hours and people fatiguing to death -- though I won't say such expectations would create same effect as mindset and legal ramifications are different, but these changes can create shift in peoples' expectations and someone do have to pay for it.
>What exactly is the reason these shipping companies seem to go into a kind of hibernation over the weekend? Surely there are people out there who would be willing to work weekends (if the pay was right)? How much more would it cost them?
Supposedly preachers lobbied the government to shut down the USPS on Sunday because people were hanging out at the post office instead of going to church.
http://atheism.about.com/b/2006/02/19/sunday-mail-service-in...
Supposedly preachers lobbied the government to shut down the USPS on Sunday because people were hanging out at the post office instead of going to church.
http://atheism.about.com/b/2006/02/19/sunday-mail-service-in...
> What exactly is the reason these shipping companies seem to go into a kind of hibernation over the weekend?
You can thank the Jews, the Christians, unions, Henry Ford, and the Great Depression.
You can thank the Jews, the Christians, unions, Henry Ford, and the Great Depression.
Yeah, I think it's important we have time off (possibly more than we do), but I think it's much less important that all line up...
Its often important that organizations that work together have operational time off that aligns well most of the time, because misalignments create latency in decision loops and, therefore, inefficient use of resources.
When you start tracing the dependencies between organizations throughout the economy, you start seeing why having a widely shared set of shared working days and working hours actually makes quite a bit of sense from that perspective.
When you start tracing the dependencies between organizations throughout the economy, you start seeing why having a widely shared set of shared working days and working hours actually makes quite a bit of sense from that perspective.
That is unquestionably a concern. I think you overrate it, though. Having more diversity in working hours would often lower latency, as there's someone available during off-hours rather than having huge gaps. We're also already dealing with a certain amount of distribution with timezones in (sorry for the cliche) "our increasingly globalized world" - I don't see that spreading that around more is going to cause more problems than it solves. As pointed out elsewhere, spreading out peak usage of things like roads and electricity provides significant benefit.
Agreed. Also there are benefits to spreading out the acceptable work week like reducing traffic congestion.
Obviously this sort of spread wouldn't work in every industry, but the idea that any "professional" should work from approximately 9-5 on M-F causes obvious lifestyle load balancing issues we could avoid by spreading it out much more were possible.
Obviously this sort of spread wouldn't work in every industry, but the idea that any "professional" should work from approximately 9-5 on M-F causes obvious lifestyle load balancing issues we could avoid by spreading it out much more were possible.
So you would be fine with it if your job was Sun-Thurs and your partner/husband/wife worked Saturday-Weds? What about kids who still go to school M-F? When would you see them There is actually a benefit to society in having weekends aligned, so that families and friends can have time off together and interact with other people.
It is important that there be sufficient overlap. It is less important that there be complete overlap. There is a downside to my wife working while I am free, but an up-side too if we are better able to distribute tasks like childcare between us.
Maintaining sufficient overlap is partly a matter of individual schedule preferences, and it gets easier as amount of free time increases (though, obviously, at a cost of overlap in work time) and as scheduling flexibility generally increases. Currently, if my wife has a "9-5" and I am stuck working something with weekend shifts, my wife typically lacks the flexibility to shift her schedule to match mine. What I am most strongly arguing for is increased flexibility where it is feasible.
Maintaining sufficient overlap is partly a matter of individual schedule preferences, and it gets easier as amount of free time increases (though, obviously, at a cost of overlap in work time) and as scheduling flexibility generally increases. Currently, if my wife has a "9-5" and I am stuck working something with weekend shifts, my wife typically lacks the flexibility to shift her schedule to match mine. What I am most strongly arguing for is increased flexibility where it is feasible.
I just read https://news.ycombinator.com/item?id=6711121 which explains the (fairly obvious?) Christian connection, but what do Jews, unions, Henry Ford, and the Great Depression have to do with it? The Jews don't even have a Sunday sabbath.
Ford was the first company in the US to institute a 5 day work week. Hoover asked companies to go to a 5 day work week in lieu of layoffs and Roosevelt passed Fair Labor Standards Act of 1938 making it mandatory for certain workers.
It is possible - indeed there are companies that will do it. Sunday delivery driver pay is about 25% higher. The thing is, the changes to the company are bigger than you might imagine, and that can make them expensive in other ways too.
One factor is what type of deliveries your company does. Some delivery companies want to deliver to offices; most offices have receptionists and are open 9-5 so deliveries are quick and you don't have to make multiple delivery attempts, the parking and roads are usually good, and offices tend to be in densely populated areas so you don't have to drive too long. Offices aren't open over the weekend.
Another factor is the shifts your staff are going to work. You have to give people several days a week if you want to keep them skilled and stop them needing a second job. You need managers as well as drivers. So you don't just have to hire one day's more warm bodies, you need to reorganise all your existing employees' shifts too.
If your company has always done Sunday deliveries, and your drivers knew they'd be working Sundays when they signed up, that's all well and good. But if you have a bunch of people who signed up with a company that always gave them Sunday off, and you have to change that, that's going to cost you a lot of staff goodwill, a.k.a. money.
One factor is what type of deliveries your company does. Some delivery companies want to deliver to offices; most offices have receptionists and are open 9-5 so deliveries are quick and you don't have to make multiple delivery attempts, the parking and roads are usually good, and offices tend to be in densely populated areas so you don't have to drive too long. Offices aren't open over the weekend.
Another factor is the shifts your staff are going to work. You have to give people several days a week if you want to keep them skilled and stop them needing a second job. You need managers as well as drivers. So you don't just have to hire one day's more warm bodies, you need to reorganise all your existing employees' shifts too.
If your company has always done Sunday deliveries, and your drivers knew they'd be working Sundays when they signed up, that's all well and good. But if you have a bunch of people who signed up with a company that always gave them Sunday off, and you have to change that, that's going to cost you a lot of staff goodwill, a.k.a. money.
> What exactly is the reason these shipping companies seem to go into a kind of hibernation over the weekend? Surely there are people out there who would be willing to work weekends (if the pay was right)? How much more would it cost them?
This disturbs me, just like forcing shops to open on the weekend. People need a break, and should have a break, just because you can't wait an extra day?
Sure, they have a choice to work, just as shop workers have a choice to work, they can always get a job somewhere else.
This disturbs me, just like forcing shops to open on the weekend. People need a break, and should have a break, just because you can't wait an extra day?
Sure, they have a choice to work, just as shop workers have a choice to work, they can always get a job somewhere else.
People need a break. People should get a break. They should also hire extra weekend help. Spreading the load out by hiring part-time but weekend-bonused workers would benefit society as a whole. It's not just going to be overtime, it's going to be more interesting and flexible work hours - And society will benefit.
Spreading the load when generalized also spreads the shops income, and will make paying sunday bonuses unsustainable for companies.
Sunday work appears great only if a portion of competitors open, it doesnt create income out of nowhere but draws it from closed competitors.
> Sunday work appears great only if a portion of competitors open, it doesnt create income out of nowhere but draws it from closed competitors.
So by the same argument--but in reverse, only opening shops one day a week or even month would not destroy wealth generation, but would just reshuffle income?
So by the same argument--but in reverse, only opening shops one day a week or even month would not destroy wealth generation, but would just reshuffle income?
What? No one said anything about taking away breaks. People work Saturday and Sunday and take their breaks during the week.
The problem I see is that your kids are in school the week... And you should have at least one day with your kids (society benefits a lot of this, and it makes day care cheaper) . Maybe have either Saturday or Sunday of mandated free time, and then Amazon could hire people either Sunday or Saturday...
Maybe that's why I live in France :-).
Maybe that's why I live in France :-).
Perhaps people with kids are best off if they look for jobs where they can spend the weekend with their kids. But not everyone has kids - some people are busy during the week with, say, university, and might welcome the chance to make a bit of money on the weekend.
Fortunately, here in Italy, Mario Monti got rid of some of the rules about working on Sunday.
Fortunately, here in Italy, Mario Monti got rid of some of the rules about working on Sunday.
But it took France until 2008 to stop sending kids to school on Saturday mornings while the parents were home, so obviously you coped without a complete overlap of leisure time among the family for a while :)
It is impossible to mandate that nobody work on any of the 7 days, because hospitals. So we already admit that some people will be working when most people are not - the question is whether we tell them to suck it up, society is going to ignore them forever, or whether we can re-arrange society so that the family of the ER doctor can also work Sunday and take Wednesday off to be together.
It is impossible to mandate that nobody work on any of the 7 days, because hospitals. So we already admit that some people will be working when most people are not - the question is whether we tell them to suck it up, society is going to ignore them forever, or whether we can re-arrange society so that the family of the ER doctor can also work Sunday and take Wednesday off to be together.
I think there are benefits to us all having breaks at the same time, so we can see friend and family. I think we can survive without everything being available every day of the week.
Public service announcement: that line of reasoning makes you a social authoritarian. You want to tell people when they can and can't go to work because you know what's best for their social life.
That ship has sailed...
It disturbs me that you seem to think that Saturday and Sunday are the only two days a week that someone can not work.
You might want to move to France or Germany.
Representatives of Amazon and the Postal Service said the Seattle-based company was taking advantage of a little-known offering available to any shipper.
So it sounds like they're just using Express mail.. not really anything special. USPS will deliver express mail on Sunday for an extra fee ($12.50). I'm in Denver, you can drop off an express mail package @ the post office in stapleton until 10pm on Saturday, and it will be delivered on Sunday by 3pm.
That facility used to be open 24hrs a day/7 days a week.. so it wouldn't surprise me if the cities amazon picked have facilities open for 24hrs, and they are able to drop off packages at 2-3am sunday, and still have them delivered on sunday (within the city, or near it).
So it sounds like they're just using Express mail.. not really anything special. USPS will deliver express mail on Sunday for an extra fee ($12.50). I'm in Denver, you can drop off an express mail package @ the post office in stapleton until 10pm on Saturday, and it will be delivered on Sunday by 3pm.
That facility used to be open 24hrs a day/7 days a week.. so it wouldn't surprise me if the cities amazon picked have facilities open for 24hrs, and they are able to drop off packages at 2-3am sunday, and still have them delivered on sunday (within the city, or near it).
Working for the post office has to be probably the best job in the USA right now - your retirement is already funded before you are even hired, thanks to congress trying to put the post office out of business.
They are not "bleeding red ink" they are just being gouged and forced to fund things even the largest corporations do not do.
They are not "bleeding red ink" they are just being gouged and forced to fund things even the largest corporations do not do.
ERISA forbids unfunded (PAYGO) pensions in the private sector. A private sector employer must put the PVFB of your pension into the fund as you earn it.
"as you earn it" is the key phrase here, the post office has to fund pension plans before you are even hired, it's a future pool of staggering size.
Pensions at the post office are probably the most secure retirement fund in the US right now, well other than what congress awards itself.
Pensions at the post office are probably the most secure retirement fund in the US right now, well other than what congress awards itself.
No, they are not required to prefund before current workers are hired.
The pension costs of future workers are simply required to be included in future projections of USPS costs. It used to be that the USPS could go to congress and say "we want to do X over the next 10 years, it will cost $Y". The $Y value was allowed to exclude the cost of retirement benefits for workers hired during those 10 years. Now it must be included.
This is simply good accounting practice.
The pension costs of future workers are simply required to be included in future projections of USPS costs. It used to be that the USPS could go to congress and say "we want to do X over the next 10 years, it will cost $Y". The $Y value was allowed to exclude the cost of retirement benefits for workers hired during those 10 years. Now it must be included.
This is simply good accounting practice.
You are incorrect. Please read the text of the law, especially section 8909a here:
https://www.govtrack.us/congress/bills/109/hr6407/text
The government is requiring USPS to set aside money for benefits which it has already promised, which is a no-brainer. Did you know that health benefits for employees in the private sector are not promised, and they have been yanked away?
https://www.govtrack.us/congress/bills/109/hr6407/text
The government is requiring USPS to set aside money for benefits which it has already promised, which is a no-brainer. Did you know that health benefits for employees in the private sector are not promised, and they have been yanked away?
I don't think ERISA says anything about health benefits. As far as I know, health benefits are also unregulated in the private sector, but then again, there is no government insurance for health benefits either like there is with defined benefit pensions (i.e. PBGC).
According to Wikipedia:
During the 1990s and 2000s, many employers who promised lifetime health coverage to their retirees limited or eliminated those benefits.[4][5] ERISA does not provide for vesting of health care benefits in the way that employees become vested in their accrued pension benefits. Employees and retirees who were promised lifetime health coverage may be able to enforce those promises by suing the employer for breach of contract, or by challenging the right of the health benefit plan to change its plan documents in order to eliminate those promised benefits.
According to Wikipedia:
During the 1990s and 2000s, many employers who promised lifetime health coverage to their retirees limited or eliminated those benefits.[4][5] ERISA does not provide for vesting of health care benefits in the way that employees become vested in their accrued pension benefits. Employees and retirees who were promised lifetime health coverage may be able to enforce those promises by suing the employer for breach of contract, or by challenging the right of the health benefit plan to change its plan documents in order to eliminate those promised benefits.
I noted elsewhere in this conversation that ERISA does contain loopholes, such as some some health care benefits. This is indeed a potential problem and one that should be fixed. Every organization, public and private, should be obligated to truthfully account for their obligations.
https://news.ycombinator.com/item?id=6711198
https://news.ycombinator.com/item?id=6711198
It is amazing how obvious it is that customer satisfaction is at the core of every new initiative Amazon launches.
Is it really? A lot of companies do this. Apple pays _a lot_ of attention to what it's customers says and guides a lot of decesions by it.
So you're refuting the "Amazon cares about customers" point by saying other companies do too? Huh?
No, I'm just questioning if it really is 'amazing' if a large portion of successful companies do the same thing.
I think madeofpalk is refuting the "amazing" part. It's not amazing if it's common.
I don't think Amazon-level customer service is all that common. Yes, some other companies like Apple do the same thing, but it's generally surprising to get that sort of support.
So we can expect most of the design decisions in iOS 7 to be reverted in iOS 8, then? Because that's what most Apple users seem to want.
Oops, should make been more clear I guess.
AppleCare and Apple Retail place enormous focus on these customer surveys.
AppleCare and Apple Retail place enormous focus on these customer surveys.
TIL that Amazon doesn't deliver on Sundays in the US.
In Japan (well, at least in cities) pretty much everything works on Sundays.
In Japan (well, at least in cities) pretty much everything works on Sundays.
Amazon is really trying to be the end all for online purchases - I bet in 10-20 years, when you need anything, you just Amazon it (you know, like Google it) :-)
Except for food (and some clothes) I already "Amazon" anything I need. Once your credit card is in there, it's too damn easy to buy stuff.
Psh. I needed those twelve bags of sour fizzy soda bottle gummie candies.
Amazon does grocery delivery in Seattle and parts of Los Angeles via AmazonFresh, and it is pretty awesome.
This is great news. The USPS is hands down the best shipping provider. Priority Mail, especially the Flat Rate boxes, are often the cheapest and fastest way to ship packages.
Not for me it isn't. In fact, one of the things I like about Amazon Prime is that--at least in my case--it means that UPS delivers a higher percentage of my packages. The issue is that, while UPS drops off the package at my door (as they have to), USPS tends to leave it hanging off my mailbox out by the road because they don't want to spend the time coming down my driveway. And I've had more than one such package stolen.
Also from my experience with apartments, UPS will leave the package at the front desk while USPS leaves the package at the post office (forcing me to go to the post office to pick it up).
This. USPS for me has also been terrible about updating their tracking information, so I don't find out until late at night when expecting a package to find I need to make this trip. It is like they wait until the end of the day to update every package status.
I think I can echo having a list package from my mailbox vs front door and it has everything to do with FedEx/Ontrac/UPS leaving the box at my front door.
One of my favorites is the recommended carrier of Monoprice, Norcon, that emails you a photo of the delivered package once delivered.
Ontrac is a west coast delivery service, and from what I can tell they keep prices low by using mid-90s beater white minivans with a company logo magnet and issuing their employees a polo T uniform.
One of my favorites is the recommended carrier of Monoprice, Norcon, that emails you a photo of the delivered package once delivered.
Ontrac is a west coast delivery service, and from what I can tell they keep prices low by using mid-90s beater white minivans with a company logo magnet and issuing their employees a polo T uniform.
USPS doesn't even have a package tracking system. It's a delivery confirmation. The fact that they sometimes update the information when it passes a post office is completely optional, that's not the point. The only requirement is that it gets updated when the package is delivered and the postman is back to the office.
Oddly enough, I got my first Sunday delivery today from Amazon via USPS, and I don't live in either of the referenced cities.
The USPS currently does Sunday delivery to catch up when it falls behind. This agreement allows Amazon to drop off at postal hubs on Sunday for same-day delivery.
In this case, I don't think that's it: this package wasn't due for delivery until the following Monday. I was pleasantly surprised when I got the text saying it had been delivered.
Companies like Instacart, Doordash, Postmates, Amazon, and Google are (in different ways) building a new, siloed delivery infrastructure. At the same time, the USPS and their local delivery infrastructure are in trouble.
Is it conceivable that the USPS could leverage their infrastructure to build a national same day delivery network? It's obviously a stretch, but they already have the scale and resources. As a country, we aren't as interested in having letters delivered to our houses anymore, but we sure are interested in groceries and appliances.
Is it conceivable that the USPS could leverage their infrastructure to build a national same day delivery network? It's obviously a stretch, but they already have the scale and resources. As a country, we aren't as interested in having letters delivered to our houses anymore, but we sure are interested in groceries and appliances.
Non-American here. Why at the start of the article does it say "...with an unlikely partner"?
(to be honest I immediately though of Owls! http://www.youtube.com/watch?v=EBfxOatX0tU)
So any idea why Amazon-Post partnership was considered as "unlikely"?
(to be honest I immediately though of Owls! http://www.youtube.com/watch?v=EBfxOatX0tU)
So any idea why Amazon-Post partnership was considered as "unlikely"?
Few people see the USPS as a serious shipping competitor to FedEx and UPS and others. They're for letter mail.
... Except for anyone doing business involved in shipping.
When I was reselling used books, USPS was the best ROI for shipping (packages and media).
When I was reselling used books, USPS was the best ROI for shipping (packages and media).
With Priority Mail now offering $50 in free insurance to the flat rate packages, it's now the obvious choice for my online retail business.
Even before then it was the clear winner. Flat rate standardized (free) packaging is such an awesome perk. USPS loses way too many of my parcels, but it's just not worth going to UPS/FedEx and paying 2x the rate plus way more hassle for a slightly reduced lost package rate.
Even before then it was the clear winner. Flat rate standardized (free) packaging is such an awesome perk. USPS loses way too many of my parcels, but it's just not worth going to UPS/FedEx and paying 2x the rate plus way more hassle for a slightly reduced lost package rate.
You should at least make UPS/FedEx available--I won't buy from you if you ship USPS only. Not worth my time for the potential hassle.
And I'm the opposite. I'll pick USPS over UPS/FedEx every time. In over 20 years of shipping I've never had a package show up at my doorstep damaged by the Postal Service. UPS can't even ship me their own envelope without ripping it. Don't even get me started on when amazon uses Lazership...
Of course you know what they say about the plural of anecdotes.
Of course you know what they say about the plural of anecdotes.
I've never had a USPS package show up damaged either, they just don't show up at all :).
Shipping is highly localized so options are always appreciated, a bad USPS delivery person or a bad UPS person can be all the difference.
Shipping is highly localized so options are always appreciated, a bad USPS delivery person or a bad UPS person can be all the difference.
It is good practice to offer multiple shipping options. Package delivery differs greatly by location. In some areas, the postal service is the best. In some areas, UPS. In some areas, Fedex.
That having been said -- because of the discounts offered to large shippers, the non-preferred carrier may cost 2x or 3x as much. For example, when Newegg switched from Fedex to UPS, they continued to offer Fedex. But they passed along the difference in price.
That having been said -- because of the discounts offered to large shippers, the non-preferred carrier may cost 2x or 3x as much. For example, when Newegg switched from Fedex to UPS, they continued to offer Fedex. But they passed along the difference in price.
The number of customers I would gain by making that available doesn't outweigh the hassle of requiring another shipping provider. It's not even close (I've tested it).
I'm curious--what is your lost package rate with USPS?
Around 3%. Really outrageous to be honest, but most of my items are ~$50 so the insurance process and I are good friends.
And I should note that UPS loses a ton of packages too. I shipped 50 laptops once and 2 went mysteriously missing (aka stolen).
And I should note that UPS loses a ton of packages too. I shipped 50 laptops once and 2 went mysteriously missing (aka stolen).
Perhaps because USPS is a pseudo-goverment organization, and the US government (and its many appendages) usually doesn't strike this sort of cooperative deal with private companies.
Except the USPS does. Just look at what they do for Netflix.
Meanwhile, in the UK, Amazon appear to have opted to not use existing services like the Post Office (who are capable enough to deliver packages) and gone with their own "Amazon Logistics" (who don't seem to be able to deliver a package).
There's a lot wrong with the US, but this kind of thinking is exactly what's right with it
I experienced this for the first time yesterday. It was surprising, especially with today being a postal holiday.
Well, this explains the Amazon package on my porch this morning. I didn't expect it until later today.
I got very excited. Then I realised you meant "Postal Service" and not "Post Office".
> The Amazon contract will be a much-needed financial boost to the Postal Service, which continues to bleed red ink as more Americans eschew "snail mail" in favor of email, instant messaging and social networks. The agency, which said it expects to lose around $6 billion this year, has been closing locations and has proposed ceasing Saturday delivery of many items to cut costs.
But the USPS is, operationally speaking, profitable; it makes about $400M in operating profit per year. So where does the $6B loss come from? It turns out that the overwhelming chunk of USPS expenses are due to a 2006 Congressional mandate that forces the agency to prepay for 75 years of benefits.
In other words, Congress believes that a hypothetical 30-year-old USPS employee's benefit costs need to be fully covered at current levels for 75 years, when the employee would then be 105. Likewise, a retiring 60-year-old USPS employee's pension benefits need to be fully covered for 75 years out -- when the retiree would then be 135 years old.
So, if USPS wants to hire, say, a new mail carrier whose benefits are worth (say) $20,000/year, they must immediately pay $1.5M into the fund (it's actually higher than that because there is a discount factor applied to account for interest and rising health care costs). Imagine if your startup or small business were held to the same requirements, and any reasonable person can see this is insanity.
Here's a WaPo article covering the problem in more detail:
http://www.washingtonpost.com/blogs/federal-eye/wp/2013/02/0...