A guest blog by VOCAL RCA
While the United States Postal Service (USPS) is heading for possible bankruptcy this October, United Parcel Service (UPS) is flourishing in profits and getting ready to open new smaller retail stores. Calling the concept “Main Street”, UPS plans on appealing to small business owners to open the stores in rural communities, according to Al Urbanski of Direct Marketing News.
Due to the Postal Accountability and Enhancement Act of 2006 (PAEA), Congress has ordered the Postal Service to pre-pay 75 years of retirement in a ten year period. The Postal Service has reported a loss of S1.9 billion during its first quarter this year. While the company continues to lose $25 million a day, and awaits Congressional reform to keep its’ doors open, UPS reported a first quarter profit of $1 billion, according to a report in the Atlanta Daily World. UPS, along with the Teamsters union, has also worked out a five year contract raising salaries for incoming and seasoned workers, which helped avert a possible strike this August. Their new “Main Street” stores will attract beginner entrepeneurs due to low, $9,950, franchise fees. On the other hand, Postmaster General, Patrick Donahoe, is selling off multiple post offices, especially landmark buildings, to the highest bidder (source: savethepostoffice.com). Basically the only act that Congress legally allowed the Postal Service, in 2012, was the renaming of about 60 post offices. USPS is scrambling to come up with other alternatives to make up for Congress’ inability to act quickly on postal reform. Congress recently blocked a proposed plan, for the Postal Service, to cut delivery days from six to five days, which might have saved the company $2 billion. The Postal Service is in the process of decreasing lobby hours in retail offices it doesn’t sell, increasing the number of processing center consolidations, and also hinted over another round of union negotiations. Meanwhile, UPS has reported a profit every year since 2006, with the exception of late 2012, which was due primarily to the fiscal cliff, according to UPS Chief Executive Officer Scott Davis (report by Moran Zhang, International Business Times Oct. 2012).
United Parcel Service is winning and the United States Postal Service is losing in the shipping business. By looking at the numbers, it appears Congress deliberatley set the Postal Service up for failure. Is the Postal Service’s monopoly on mailboxes the reason for this favoritism? Why does Congress want to dismantle a company that obviously works? Is the retirement payment, that the Postal Service is making, have anything to do with why Congress is moving so slowly on postal reform? Is there a lobbyist somewhere, being paid by UPS, that started all this? All unanswered questions on the never ending saga that is the plight of the United States Postal Service. If Congress fails to act by October the last remaining question is, with its’ clear recent dominance, will UPS own the Postal Service when it goes bankrupt?
Vocal RCA is a Rural Carrier Associate