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Postal Service to cut 30,000 jobs; What would you do to reinvent it?

By | August 25, 2009, 12:18 PM PDT

The U.S. Postal Service plans to eliminate 30,000 jobs in a move to save $500 million in the next year. The Postal Service plans to offer buyouts to entice employees to retire or resign before the end of its fiscal year Sept. 30.

The Postal Service said in a statement that it cut a deal with the American Postal Workers Union (APWU) or the National Postal Mail Handlers Union (NPMHU) to accelerate job cuts.

Why? The Postal Service is under pressure from a weak economy and the use of the Internet as a payment mechanism.

In a statement, the Postal Service said:

Advances in mail processing technology and the continuing recession have led the Postal Service to more aggressively match work hours with work load. The majority of employees eligible for the incentive work in mail processing facilities.

Carriers aren’t affected.

The move is part of a larger overhaul for the Postal Service. In fiscal 2009, the Postal Service expects to save about $6 billion through cutting work hours, halting construction, closing offices, reducing staffing levels and consolidating processing operations.

However, the larger question is whether those moves will be enough. The Postal Service may need to be reinvented going forward. Of course, that’s easier said than done. I’ll make you king of the Postal Service for a day. What would you do?

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Larry Dignan

About Larry Dignan

Larry Dignan is the editor-in-chief of SmartPlanet.

Larry Dignan

Larry Dignan

Editor-in-Chief

Larry Dignan is editor-in-chief of SmartPlanet and ZDNet. He is also editorial director of TechRepublic. Previously, he was an editor at eWeek, Baseline and CNET News. He has written for WallStreetWeek.com, Inter@ctive Week, New York Times and Financial Planning. He holds degrees from the Columbia University Graduate School of Journalism and the University of Delaware. He is based in New York but resides in Pennsylvania.

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Larry Dignan

Larry Dignan
Larry Dignan does not hold any investments in the companies he covers.
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
The United States government should have forseen the trend to electronic messaging when they had ARPANET (the mother of the Internet) sending millions of packets back and forth 30 years ago and made themselves into an ISP like everyone else. We trusted them with our snail mail for over 200 years. We should have been able to trust them with our email...for a small fee, of course. Unfortunately, I don't believe that trust is there so much anymore.
Posted by Ziastar60
25th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
Very simple solution. Make bulk (junk) mail pay the same rates as other mail. Require employees to perform and conduct themselves as they would have to in the private sector.
Perform extensive, computerized route planning from the national to local neighborhood delivery.
This should reduce overhead and direct expense by 50% or more.

Posted by neddly68
25th Aug 2009
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digitize the mail
I would like to see a secure service offered that open mail, scanned and sent to me digitally. Reduce cost and increased profit
Posted by Jeffbrandt
25th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
I think we could adapt to every other day delivery from the USPS. That would allow some routes to be serviced Monday, Wednesday and Friday and other routes to be serviced Tuesday, Thursday and Saturday. At the most, it might add a couple of additional days to an already erratic delivery cycle.
Posted by G.H.
25th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
Deliver more small packages!
The USPS is the only organization that delivers letters and small packages to residential addresses for a reasonable cost. Unlike UPS or FedEx, (which specialize in deliveries to businesses) the Post Office goes to each house every day anyway.
Example: a six ounce package from California to Miami Beach Florida is $2.07 by mail. UPS Ground (5 days) costs $10.39 They should market the hell out of this price advantage.
If they can survive a few years, they will be well positioned for a future when the price of gas and the convenience of internet ordering drives more and more purchases online. DVD's, batteries, cell phones, golf balls, vitamins, etc. should be delivered by the USPS. That would be much more efficient and cost effective than getting in your car and driving to the mall.
Posted by Simon Peter Alciere
25th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
Eliminate 'spam'. No 'bulk to resident' junk mail anymore. Print at destination service standard for addressed bulk mail.Streamline the priority mail to a more courier type of service.Refine zip code syustem to be address specific and entirely scan able code. Establish this use by charging high differential rate for non stadardized addressing.
Posted by danm50
25th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?

5Simon Peter Alciere has a very good answer.
The USPS needs to do what it has always done best: deliver material items.
I can't tell you how much trouble United Parcel has caused by delivering well marked perishable items (medicines) to sunny areas in the summer. UPS doesn't care because homeowners don't tip like businesses do.
USPS carriers go to every address anyway, so delivering small and large parcels doesn't cost a lot more. UPS & FedEX find it cheaper to have USPS deliver packages to homes rather than waste a lot of time chasing all over the countryside in unfamiliar areas.
USPS PO Boxes are usually climate controlled (great fro perishables), but UPS counters Post Office competition by getting businesses to agree to not deliver to Post Office boxes in exchange for discounts that are offset by hidden surcharges.
Electronic transmission has been tried by USPS in several formats, but businesses have found a way to make that work better by doing eMail and other electronic transmission of hard copy.
I do find paying bills by mail to be more reliable than electronic bill pay. At least I don't have to deal with hackers, a broken server, or a personal computer that has gone down for a few weeks.
The best thing the USPS can do is to continue cutting fat and mechanizing hardcopy movement.
Excessing employees could be speeded up by moving excess employees to other federal agencies that are currently expanding. That would be the cheapest way of excessing employees in the short and long run. I don't believe that avenue has been seriously explored except in isolated cases.
Posted by FreeloaderFred
25th Aug 2009
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Follow example of competition
Other companies who deliver mail and packages can do it apparently do it cheaper and are even growing. See how they can cut costs in another way. Making their employees unemployed is the most easy way to reduce costs and just moving the problem to the government.
Bottomline: They need to find a way to become more selfsupporting
Posted by innocentisart
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
The best way for the USPS to not go broke would be for them to stop delivering packages. The first class mail subsidises their package service. Other than that, actually charge what it costs for their packages. The next thing for them to do would be make their tracking numbers actually work. We sent a package by USPS and got a tracking number and after they lost it, all they would tell us is which post office actually lost it. I won't send a package by USPS because I actually want it to get there!
FreeloaderFred seems to think that UPS & FedEx choose to not deliver to PO Boxes - they not allowed to do so by the Post Office, I suspect because the PO Boxes are on government property and UPS & FedEx drivers and employees are not allowed access to them. If you sent a package to a PO Box at some other location, say Mail Boxes Etc, this might be different.
Posted by mike@...
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
One of the problems is a Post Office in every town, even if they don't
make a profit. You don't see FedEx or UPS with an office in every burg.
Close the small or ones that don't show a profit like a real business.
The problem is have you ever seen what happens if you try to close a
Post Office. All hell breaks loose. So until the Post Office is allowed to
run like other businesses they will continue to decline.
Posted by jimzim
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
In my view, if they would stop carrying junk mail they would save a bundle. First off, even though there is revenue in junk mail it is not sufficient to offset the volume. Also much of it is waste and is necessarily hauled off to the land fills by the Post Office. I have seen all this in person as an outsider but working on post office property. Besides, I would just as soon not have any in my mail box! Those who produce it and don't pay full mail fees can find some other way to advertise!
Posted by elnpayne@...
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
I'm British and so not familiar with the service, however they may learn
from the British system that has diversified into financial instruments
like savings. An online stock dealing service for individual stocks may
work well. They could take a serious look at their philatelic services and
see if they are serving the international community as well as they can
do. In the UK, commemorative stamps for collectors aren't marketed
very well and the postcards that are printed to match them are bought
mostly by children. There are more postcard collectors in the world
than any other kind of collector and they don't cater to them. The cards
are printed to a very high standard by security printers too.

I suspect the US postal service will cut workers and make the
remaining ones work harder. the bosses will get fa fat bonus and
continue to sit on their fat asses!
Posted by Mike106132000@...
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
To solve the argent USPS problems is to replace most of the management teams, They're mostly not qualify for that jobs, find peoples are qualify.Because most of my families and friends work for USPS.They all are not happy to work for USPS,they work there because they can feed their family, they dislike their supervisors, They're doing dirty jobs for management teams, they're all behind in the dark in their comforted office.
Posted by kathachen45
26th Aug 2009
0 Votes
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
To solve the argent USPS problems is replace most the management teams, They're mostly not qualify for that jobs, find peoples are qualify.Because most of my families and friends work for USPS.They all are not happy to work for USPS,they work there for to make a living, they dislike their supervisors, They're doing dirty jobs for management teams, they're all behind in the dark in their comforted office
Posted by kathachen45
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
What the Post Office should do, is to provide a better value for package delivery service, and compete against UPS and FED-EX. Others have pointed out that mail is already delivered to every address in a community, so why not deliver packages.

The reasons why small businesses are reluctant to use the Post Office for package delivery are:

1) Unless you use a postage meter, mail weighing more than 12 ounces must be handed to a Post Office clerk at an inside counter.

2) Many added services, such as insurance , certified delivery, tracking numbers etc also require an inside visit. I can not speak for FED-EX, but with UPS, all you had to do was to put the tracking label on the package. In fact, if you were to use UPS' mailing software, the barcode gets printed right on the address label.

3) Inside visits often take more time than it is worth. Slow clerks, often only one or two, despite people standing in line. This is typically a bureaucrat's way of thinking. No wonder people prefer UPS and FED-EX.

Compare that, to a typical business where UPS or FED-EX stops by, and picks up your packages. For a business, time is money, and many businesses do not like the idea of paying their employees just to stand in a line.
Posted by fatman65535
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
How many people have noticed that there is a FED-EX box outside all USPS offices.
All Priority Mail and all Express Mail is transported by FED-EX. As a contractor for the USPS I know this and when I get a late slip (PS Form 5466) I get paid for it. If I do not send it in I do not.
All the Bulk Mail Centers were to be contracted out but this has been stopped as far as i know.
Almost all USPS HCR contractors are non-union and are required to pay drivers the standard amount of $19.14 per hour plus health and welfare and vacation etc. On one route that comes to over $78,000 per year. I could probably hire a driver for $10 or $12 dollars per hour and save them a bunch of money.
They currently buy my diesel for me, that way there is a possibility that no state or federal tax is paid on this fuel. I have no idea what kind of contract they have with U.S Bank which is the parent company of the Voyager Program.
I hope this enlightens some people to parts of the postal service that they are not aware of.
Posted by oregondallas
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
I'm not a businessman, so I don't have a solution for the USPS. I sell on e-bay and the USPS "Click n Ship" works great for me. I print the labels at home, stick them on the box, and bypass the line of people waiting and just sit the box on the counter. I've had no problems with the packages getting to their destinations. Maybe Donald Trump should run USPS for a while...!!
Posted by texasdan78070
26th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
Take away their monopoly and subsidies; letting private companies compete on mail delivery. Now the powerful union has created an unaccountable work force with Burger King worker skills making $50K plus very generous benefits. There will never be reform as long as they remain a politically protected constituency.
Posted by dixon757@...
26th Aug 2009
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It's about time !
When times are tough the private sector has no choice but to cut back. It is about time that they realize that they need a workforce reduction. They are going to lose $7 billion of our taxpayer money this year and expected to do the same next year. We cannot afford this. UPS and Fedex profits are down but they are still operating in the black.

They will likely never be an efficient enterprise. A government run organization with public financing never will. They lack the accountability and sense of urgency that a private company has.

This is one of the reasons we should not let the government run our healthcare system....only this time people's lives will hand in the balance.....
Posted by pizzaman7
27th Aug 2009
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Norman Harrop
Make delivery by battery(golfcart/smallthreewheel/manmoover) whatever it takes to speed delivery but still make it personal. Get rid of union dues, they are a waist in todays economy. Make the service employ-owned, employ owned drives the self motovation to improve techniques. Cut out as many left turns as possible on delivery routes, saves time and expenses sitting. Go green as much as possible to save economy, plant trees, filter water through natural vegitation. Help self but also help the economy as much as you can. Be a good neighbor!!!!!!!!!!!!! thanks
Posted by Norman Harrop
27th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
Cut the postal rates !!! [and more customers would again use these facilities.]
I'm overseas - not in the US and in the past couple of years the cost of shipping outside the US has gone into orbit - increased by 10 times what the rates were just a couple of years back.
I hope this was not a move by the multi nationals to keep US trade to its own citizens ... and not the growing global market over the internet ...
Posted by trog7
27th Aug 2009
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RE: Postal Service to cut 30,000 jobs; What would you do to reinvent it?
I worked in the Post Office for 22 years, so I know that of which I speak. 1st Class mail and parcel are losses in the P.O. 3rd Class (Junk Mail) has always paid the way. when postage went up yet again 50-60% of 3rd class mailers look for more cost efficient ways to get their mailers out. (doorknobs, local papers, E-mails). postage must be lowered at least 10 cents across the board, thus third class mailers would be able to use the P.O. again. and postal use would soar. (cmpuffkid@msn.com)
Posted by cmpuffkid@...
29th Aug 2009
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