United States Congress: Picking Winners and Losers in the Shipping Game

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

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Yes, UPS has 2 BIG lobbyists in Congress named Darrell Issa & Dennis Ross. Issa also gets a large chunk of his $$$ from the Koch Bros., who have always advocated for our privatization. The end result will be UPS & Fed-Ex taking the highly profitable business of the dense urban areas, called cream-skimming, and throwing the dregs, the rural areas, for the government to take care of. If UPS won't go into all areas everyday now (i.e., see drop shipping @ the P.O.), they sure won't when they have the whole pie. What the aforementioned players want is a… Read more »

Well said! We are good at what we do! But we need help to do our jobs, i.e. get rid of the pre-funding requirement. Going private isn't good for the service or the people!

UPS is openly traded on the stock market so they always have a way to raise money if the need is there. Fed Ex too. I have always believed that UPS has deep pockets for the legalized bribery they call lobbying in Washington DC. In 2006 when the Democratic dominated Congress passed the prefunding bill, I wondered who was behind it and why? Why prefund retirees who aren't even born yet? I never saw the sense in it. I do believe USPS & Donahoe are trying to lead us into privatization. While at the same time they want what's best… Read more »