They aren't losing money on the shipping for Amazon, it was determined months ago when this first came out (as "revealed" by a hedge fund manager with ties to FedEx) that the USPS was still making a profit from Amazon, but realistically unless you are charging high dollar amounts, delivering to Rosebud, Nebraska is not going to be profitable.
However, even then they were profitable... up until the GOP required them to pay into pension funds for employees who do not even exist yet.
The USPS using accounting standards no other group (corporation or government agency) meets with regard to its pension. If it calculated its pensions costs using normal methods, its profitable.
And entities such as the state of Illinois, CalPERS, and various corporate pensions (for rank-and-file) are in serious trouble with pension underfunding despite *all* asset prices being at all-time highs.
Imagine what happens if asset prices revert to mean. Those pensions using magical accounting methods and wishful thinking future return projects are going bust.
The GOP has ruinous ideas for the general prosperity of the country as a whole but their insistence on discipline for the USPS's pension is not a ba
by Anonymous Coward writes:
on Friday December 29, 2017 @07:14PM (#55831249)
The USPS using accounting standards no other group (corporation or government agency) meets with regard to its pension. If it calculated its pensions costs using normal methods, its profitable.
Perhaps other groups *should* pre-pay their pensions. Pensions which were calculated using "normal" methods are going belly up all over the place.
Here's a small sampling the Pension Benefit Guarantee Corp's big ticket writeoffs... Delphi Autoparts ($6.1B underfunded) United, USAir, Delta, PanAm, TWA Airlines ($7.4B+$2.8B+$1.6B+$0.8B+$0.7B underfunded) Bethlehem, LTV Steel ($3.7B+$2.1B underfunded)
Then there's the United Mine Workers of America pension bailout that's been kicking around congress that people think will cost $600B...
And there's the Central States Pension fund insolvancy controversy.
The problem with pensions for industries that are crashing is that with "normal" accounting rules they can assume historic contribution rates in their actuarial computations even if they are in decline (like the auto, steel, coal and trucking businesses). Then the pensions need bailing out and retirees collect pennies on the dollar (most pensions are only insured at 30cents/dollar and that assumes that the underwriting remains solvent, which is the problem with the PBGC, UMWA, and Central States pension authorities). Some might think it is a *good* idea that the postal services don't use "normal" accounting rules for their pensions. Unless they only listen to talking points spit out by talking heads.
Every government agency prepays the pension of their employees. The annual meeting before congress is usually held in February if you want to read the status notes.
So where did you find that lie?
I'm not talking about prepayment of pension funds. I'm talking about how, uniquely among federal agencies, when new information changes the funds needed for prepayments such that the USPS overpayed, it neither gets a refund nor even to count those overpayments in a previous year as towards the payments required in a current/future year. The account is just permentantly overpaid. In 2012, it was to the tune of 11.2 billion
Guessing from your claim that this is a lie, I assume you're pretty conservative. There are a lot of sources, but even the Heritage Foundation has supported these claims.
The issue that the USPS was saying that since their employees die earlier they should pay less then the rules used for all other government agencies?
First they were not not unique there were other agencies that were having the same issue. Second they were not overpaying, if you read the Heritage Foundation articles the USPS complaints were that people were dying earlier and stayed in similar jobs longer then the normal person, it is like complaining that you overpaid for car insurance because you had no a
You might. National postal services are often expensive to run because they have a mandate to offer comparable service everywhere, not just on profitable runs. For example, the private courier services will not bring a package nearer than 100 km to my parents' home, but the national postal service delivers within walking distance.
Decreasing the price of to capture more of the market and fill underused capacity can improve profit.
For example, the private courier services will not bring a package nearer than 100 km to my parents' home, but the national postal service delivers within walking distance.
I've got the exact opposite problem: ALL of the private courier services will bring packages right to my door, while the national postal service insists on dripping it off a good 20 miles away.
They also add a 24 hour hold for some reason, during which my package is in limbo, so Amazon's "2 day shipping" always turns into at least 3 days with the national carrier, whereas FedEx/UPS/Purolator all have it on NY porch within 48 hours or less.
Long story short, don't generalise. Private carriers provide better
Deliver 1 package to my house a day for $5, lose money. Drop off 10 packages a day at my house for $40 and you can make money.
Same with your local ice cream shop, raising prices because they aren't making money isn't necessarily a way to profitability. It is entirely possible that if they dropped prices they could increase business enough to become profitable.
I think they cover that sort of stuff in an actual MBA program.
Congress controls how much USPS can raise rates. The same Congress that sabotaged them with a 75 year pension fund is also sabotaging them with forcing them to keep their rates absurdly low.
Well maybe (Score:5, Insightful)
the GOP shouldn't have forced them to pre-fund the pension plan then.
Re:Well maybe... not. (Score:2, Insightful)
...and that makes them decide to charge less?
Kinda got that backwards.
If you have financial problems, you don't charge less money for something when you're already losing money on it.
Re: (Score:2, Informative)
They aren't losing money on the shipping for Amazon, it was determined months ago when this first came out (as "revealed" by a hedge fund manager with ties to FedEx) that the USPS was still making a profit from Amazon, but realistically unless you are charging high dollar amounts, delivering to Rosebud, Nebraska is not going to be profitable.
However, even then they were profitable... up until the GOP required them to pay into pension funds for employees who do not even exist yet.
Re:Well maybe... not. (Score:5, Informative)
The USPS using accounting standards no other group (corporation or government agency) meets with regard to its pension. If it calculated its pensions costs using normal methods, its profitable.
Re: (Score:1)
And entities such as the state of Illinois, CalPERS, and various corporate pensions (for rank-and-file) are in serious trouble with pension underfunding despite *all* asset prices being at all-time highs.
Imagine what happens if asset prices revert to mean. Those pensions using magical accounting methods and wishful thinking future return projects are going bust.
The GOP has ruinous ideas for the general prosperity of the country as a whole but their insistence on discipline for the USPS's pension is not a ba
Re:Well maybe... not. (Score:5, Insightful)
The USPS using accounting standards no other group (corporation or government agency) meets with regard to its pension. If it calculated its pensions costs using normal methods, its profitable.
Perhaps other groups *should* pre-pay their pensions. Pensions which were calculated using "normal" methods are going belly up all over the place.
Here's a small sampling the Pension Benefit Guarantee Corp's big ticket writeoffs...
Delphi Autoparts ($6.1B underfunded)
United, USAir, Delta, PanAm, TWA Airlines ($7.4B+$2.8B+$1.6B+$0.8B+$0.7B underfunded)
Bethlehem, LTV Steel ($3.7B+$2.1B underfunded)
Then there's the United Mine Workers of America pension bailout that's been kicking around congress that people think will cost $600B...
And there's the Central States Pension fund insolvancy controversy.
The problem with pensions for industries that are crashing is that with "normal" accounting rules they can assume historic contribution rates in their actuarial computations even if they are in decline (like the auto, steel, coal and trucking businesses). Then the pensions need bailing out and retirees collect pennies on the dollar (most pensions are only insured at 30cents/dollar and that assumes that the underwriting remains solvent, which is the problem with the PBGC, UMWA, and Central States pension authorities). Some might think it is a *good* idea that the postal services don't use "normal" accounting rules for their pensions. Unless they only listen to talking points spit out by talking heads.
Re: (Score:2)
So where did you find that lie?
Re:Well maybe... not. (Score:4, Informative)
I'm not talking about prepayment of pension funds. I'm talking about how, uniquely among federal agencies, when new information changes the funds needed for prepayments such that the USPS overpayed, it neither gets a refund nor even to count those overpayments in a previous year as towards the payments required in a current/future year. The account is just permentantly overpaid. In 2012, it was to the tune of 11.2 billion
Guessing from your claim that this is a lie, I assume you're pretty conservative. There are a lot of sources, but even the Heritage Foundation has supported these claims.
Re: (Score:2)
First they were not not unique there were other agencies that were having the same issue. Second they were not overpaying, if you read the Heritage Foundation articles the USPS complaints were that people were dying earlier and stayed in similar jobs longer then the normal person, it is like complaining that you overpaid for car insurance because you had no a
Re: (Score:2)
No, that wasn't the issue at all. It was carrying forward issues from the switchover in '74 with regard to payrates and such.
Re:Well maybe... not. (Score:4, Interesting)
You might. National postal services are often expensive to run because they have a mandate to offer comparable service everywhere, not just on profitable runs. For example, the private courier services will not bring a package nearer than 100 km to my parents' home, but the national postal service delivers within walking distance.
Decreasing the price of to capture more of the market and fill underused capacity can improve profit.
Re: Well maybe... not. (Score:2)
For example, the private courier services will not bring a package nearer than 100 km to my parents' home, but the national postal service delivers within walking distance.
I've got the exact opposite problem: ALL of the private courier services will bring packages right to my door, while the national postal service insists on dripping it off a good 20 miles away.
They also add a 24 hour hold for some reason, during which my package is in limbo, so Amazon's "2 day shipping" always turns into at least 3 days with the national carrier, whereas FedEx/UPS/Purolator all have it on NY porch within 48 hours or less.
Long story short, don't generalise. Private carriers provide better
Re: (Score:3)
No no, you don't get it. Sure you lose money on each individual unit, but you make up for it with volume! Trust me, I have an MBA.
Re: (Score:2)
You can make it up with increased volumes.
Deliver 1 package to my house a day for $5, lose money. Drop off 10 packages a day at my house for $40 and you can make money.
Same with your local ice cream shop, raising prices because they aren't making money isn't necessarily a way to profitability. It is entirely possible that if they dropped prices they could increase business enough to become profitable.
I think they cover that sort of stuff in an actual MBA program.
Re:Well maybe... not. (Score:4, Insightful)
Congress controls how much USPS can raise rates. The same Congress that sabotaged them with a 75 year pension fund is also sabotaging them with forcing them to keep their rates absurdly low.