Where is the good news?
USPS loses lots of money. So what?
If USPS raises its rates by 10% to break even, it would have little effect on Canadian's ability to compete with American selling within the USA.
The cost of shipping a parcel within the USA may go up from $4 to $4.40 while it still costs $10/$15 to send the same parcel from Canada.
Where is the good news?
And, if Canada Post were using the same accounting standards as USPS, what do you think the loss would be here? By what percentage would Canada Post have to raise rates in Canada to break even?
Where is the good news?
"translates to 40 cents a package?"
That was used as an example. In the nine months ended June 30, 2011 (reported a few days ago), USPS had total revenue of $49,877 millions and a net loss of $5,657 millions (or about 11%). The results are very similar to the same period last year when they lost $5,379 millions.
If USPS were to raise the price of all services by 11%, it would break even (assuming no drop in sales).
That 11% would be meaningful to US sellers who would have to increase their shipping charge by 11% to recover their increased postage cost.
However, when looking at the big picture, that difference of a few cents would not solve the huge difference of several dollars per parcel between USPS domestic shipping (within the USA) and the shipping cost charged by Canada Post to ship the same parcel from Canada to the USA.
Once again, let me ask the question: where if the good news?
For more information on the recently released USPS financial results, please take a look at:
http://about.usps.com/who-we-are/financials/financial-conditions-results-reports/fy2011-q3.pdf
How do you measure your weekly cost of travelling to and crossing the border? Your time?
For what? Ten parcels? Fifteen parcels?
How much does that total cost (car expenses, out of pocket and value of time) work out per parcel?
Postal Service urges Congress to allow layoffs, cut benefits.
CNN Money - Laurie Segall, On Friday August 12, 2011, 8:12 am EDT
Hundreds of thousands of postal workers could soon lose their jobs, or face drastic changes to their benefits. According to documents obtained by CNNMoney, the United States Postal Service is appealing to Congress to remove collective bargaining restrictions in order to lay off 120,000 workers. It also wants congressional approval to replace existing government health care and retirement plans.
The post office claims it needs to eliminate 220,000 positions, or more than 30% of its staff by 2015, but only 100,000 of those positions can be made through attrition. The other 120,000 must come from lay offs, according to the documents. "To restore the Postal Service to financial viability, it is imperative that we have the ability to reduce our workforce rapidly," the USPS wrote.
The USPS is also asking Congress to change legislation that requires postal workers to get federal health care and retirement benefits. Instead, the Postal Service would replace them with its own benefit plans.
Currently, postal employees participate in the Federal Employees Health Benefits program, the Civil Service Retirement System and the Federal Employees Retirement System. If given congressional approval, the Post Office would replace those with new plans that would save money, while offering comparable benefits to employees, according to the documents.
In the documents, the USPS lays out the harsh reality of the situation: mounting losses, declining mail volume due both to the recession and the shift toward digital alternatives, and the need for drastic measures to cut costs.
