Waste not

I’m not normally one to champion for smaller government. I think that most federal programs, no matter how poorly run they may be, have some merit and help further some worthy cause.

But as I walked in the door tonight and checked the mail, I had an epiphany. Why doesn’t the U.S. Postal Service switch to delivering mail on alternate days, at least for residential delivery? In our mail stream, light as it may be (thanks, Catalog Choice!), there isn’t a single thing that I would miss were it delayed an extra day.

With all of the Internets and tubes that we have crisscrossing this great country of ours, maybe daily mail service is becoming a luxury that people would be willing to give up. At the very least, it would probably be easier to forgo than, say, our “right” to buy cheap gasoline.

Plus, this idea gives me a chance to dust off my financial analysis (thanks, employee benefits!) “skills”. To wit, and with plenty of fuzzy math:

The USPS is, roughly speaking, an $80 billion/year operation. There are about 290,000 city and rural carriers, which is about 37% of the total workforce. Salaries and health care don’t come cheap – “Compensation and Benefits” eats up about $54 bn/year; 37% of that is about $20 bn.

Now, imagine that through retirement and attrition the Postal Service was able to winnow its delivery force to half of what it is today. No GM-style buyouts or layoffs here. This reduced force would be tasked with covering the same area but with less frequency. Instead of one neighborhood, say, a mail carrier would be responsible for two, but on separate days. Bags might be heavier or shifts might run longer, but modest salary increases do wonders for the working spirit.

Through the reduction of these positions alone, a savings of $7-$8 bn/year (if not more) could be had. That would certainly be enough to cover the $5 bn loss in 2007, and would keep further rate increases at bay.

Unlike mass transit, where the utility and utilization of the system increases with increased frequency of service, to a point, I think that home mail delivery is actually at that inflection point. The service we are getting is not cost-effective.

Would this be the start of a downward spiral for the USPS? The signal of the beginning of the end? Perhaps. But I see them going down that road anyway. Note the decrease in the volume of First-Class and Periodical mail. These are the largest classes of mail that most people actually care about getting at home. Standard Mail, which has shown an increase, is the class used to send “business” (read: junk) mail at a discounted rate. From this, it appears that rate increases and an increased reliance on Standard Mail is what keeps the boat afloat. As a business model, if it works, it works, but as a public service, I think it kind of stinks.

Maybe this idea should go to Halfbakery for some tough love.

February 21 2008