Ash UK/US

The title pretty much says it all, the 500 year old Royal Mail service will be no more and will become privately owned. The government run USPS is also struggling and in debt will we likely see the same thing in the US?

http://www.huffingtonpost.com/2013/0...6pLid%3D373652

Pulaski

Presumably that explains the mega-increase in the price of postage a couple of years ago. That said, it doesn't make a scrap of difference, the six days a week delivery of paper to every home in the country (UK & US) is not a long term, or even a medium term, sustainable business model, but like the car, steel, and coal industries, privatisation in the UK is an easy way for the government to distance itself from a progressive wind-down of the mail delivery business.

Sally Redux

Will probably still require subsidy like the rail companies.

Steve_

You're talking about a country that can't even replace the $1 bill with a coin. They couldn't even get the end of Saturday delivery agreed to.

So the Treasury Dept. looks set to keep bailing out USPS with "loans" for awhile.

I mean look at the totally misleading APWU ads that are already on the TV and that's just about cutbacks. If it was privatized, the cuts would be vastly more severe.

Here in Canada, Canada Post said new workers would have substantially cut back pensions, etc. the union protested and then it all fell apart because no-one really cared, hey ho just use e-mail and Fedex instead. But at least Canada Post is marginally profitable.

I can just imagine the protests if USPS was as crap as Canada Post, someone mailed me a letter from Yellowknife on August 30th and I still haven't gotten it.

"Oh no, I ordered a widget from craponline.com and it took over a week to get here!!! Aaaagggghhh."

The whole business model of on-line retailers would collapse I reckon, in Canada we have to go to these things called "shops" if we want something in a timely manner.

Also carriers like UPS and Fedex use the postal service for local logistics in the US (i.e. they deliver to the post office) so their rates would go up to, in order to maintain their delivery times.

Go to fedex.com and fedex.ca and compare Saturday delivery rates.

sir_eccles

BBC report said the unions were already discussing strike action.

Pulaski

Well of course they would, after all strike action worked so well to "secure the future of the industry", for the miners, the railwaymen (who, coincidentally, lost the long distance mail contract after repeated strike action) the BL employees, the steel workers, and the shipbuilders!

bewildering

The postal service is different from miners, the railwaymen, the steel workers, and the shipbuilders. The postal service is a utility.

We city folk subsidize the country folk in terms of electricity, water supply and communications. I am fairly certain that postal service is more similar to these utilities than other industries.

There is also a lack of alternative as private companies avoid unprofitable areas. They instead use the US/UK postal service in these areas.

sir_eccles

This was always the problem with competition with Royal Mail. Nobody else is forced to deliver to everyone for the same price from John o'groats to Land's End. I'm sure after privatization, there will be huge chunks of rural UK that will be disenfranchised.

Pulaski

My point was primarily that strikes did not halt the privatization, and if anything encouraged the government to distance itself from a bolshie workforce. Secondarily the strikes and privatization accelerated an inevitable decline in the business. IMO the delivery of paper mail is in a long term and irreversible decline. We have gone from relying on the delivery of mail for all bills, statements, and written communication to being able to get almost everything electronically in a period of just 15 years. As the population ages the number of people relying on mail delivery is going to decline further, much further, and striking isn't going to make a scrap of positive difference. And I added "positive" because everyone who is inconvenienced by the strikes will be another customer looking into alternative ways to send and receive the information and payments without using the Royal Mail, so the direct effect of strike action will be to accelerate the decline.

Michael

It would be great if everyone in the US knew how to access the internet to handle their finances but they don't and depending on mail especially the rural areas. Eventually within another 30-50 years, that may be possible and then snail mail could disappear.

The bigger issue are parcels. In many outlying rural areas, USPS does a lot of the final mile deliveries for other carriers since it has to deliver mail in those areas anyway and it is too expensive for private carriers to drive hundreds of miles to deliver just one package. If snail mail disappears, parcel delivery will also likely disappear from some rural areas since it would likely be too expensive.

I suspect Canada already has many of those problems once you get more then a few hundred miles from the US border.

Steve_

Legally they cannot do that (privatized or not) as terms of their licence, OFCOM has oversight and that is the main thing they look for, changes in policy that would adversely affect rural areas. In the last few years Royal Mail has been trying to do that and OFCOM keeps slapping them down, because they know they need to be profitable.

Steve_

Well I don't think anyone is arguing for it to disappear, the question is whether people will be okay with it being very much slower as it is in Canada. Knowing Americans, "don't tax us but give us everything anyway" then there will be opposition.

Still bloody waiting for this letter from up north.

sir_eccles

I saw an amusing version of a "while you were out card" this morning:



http://www.huffingtonpost.co.uk/2013...n_3914182.html

Pulaski

I suspect a lot of the problem is poverty and education, and at the lower strata of society that might not change much, and so reliance on a waning postal service will be another wedge between the poorest classes and everyone else. It will certainly alienate the rural poor, and effectively force at least some of them to move into the cities.

Michael

Whether the mail is privatized or not privatized, the only way to make it profitable would be either to eliminate services or significantly reduce delivery to many rural areas since that is the big money losers for the postal service.

With experiences from AT&T being a similar monopoly prior to the 1980s, I'd rather have the government do it then a private monopoly.

Currently anything USPS wants to do, the government has to approve whether it is to cut services, increase rates, upgrade equipment, and salaries are set by the government.

When AT&T was a monopoly, executives had multimillion dollar salaries, they invested in pet projects (i.e. Unix which cost rate payers billions of dollars and was sold for $200 million when AT&T was broken up), were allowed to raise rates to maintain a specific maximum profit margin, and therefore the more they spent, the more they made. If AT&T was a public company, conservatives would have been screaming about the large salaries, high cost of service, poor service, and inefficiencies. The cost of a long distance phone call in the early 1970s was about $1 per minute (3 minutes minimum) but USPS was only charging only 8 cents per letter when the medium family income was about $6,000 per year.