FedEx Plundering & Privatization of the U.S. Postal Service

that was a long time ago when government economists weren't as intelligent as they are now

today government can see profit margins better in different industries such as the postal carrier industry and set proper prices using USPS so that the private carriers like FedEx have to lower their rates for the consumers or go out of business

if it were not for UPS and USPS everyone would pay grossly unfair high market prices

 

No dice again. Might want to take some time to read Hayek's "Use of Knowledge In Society", it's not that they aren't smart enough, it's that they cannot and will not ever have enough information to play the role of a market, there's entirely too much tacit information they just cannot attain.

Just like the "grossly unfair" prices walmart charges? Oh wait... If prices were "grossly unfair", no one would buy the product, the market set prices based on what people are willing to pay, there should be no other factors influencing price because the consequences result in consumers getting lower quality products, or getting none at all as a result of scarcity.

Learn more about why price controls are a bad idea.

 

PatrickT wrote: "In the city in Colorado in which I lived we had a Mailboxes R Us right across the street from the main Post Office. I and others went to Mailboxes because service was faster and people were polite."

texmaster wrote, after revealing that he is a FedEx employee: "They [USPS] are slow, incredibly apathetic and incompetent."

serlak2007 wrote: "I do agree they [USPS] suck at delivering packages, why don't they stick to what they do best - delivering mail? ... I don't ship anything with them after they lost my computer without any traces."

Shiva_TD wrote: "There is no question in anyone's mind that UPS and FedEx operate more efficiently than the USPS. That's why they have customers. If I ship something UPS or FedEx ground it will actually get there in a week. I've had packages that I sent USPS where I was told they would arrive within 9 business days take up to a month to arrive. At least one never arrived at all."

The premise in the OP is that FedEx has greatly influenced the plunder & privatization of the postal service. That contention hasn't been refuted, let alone addressed. It and the supporting evidence has been ignored, while posters go on praising FedEx and calling for the privatization of USPS. Note that I cited comments that pertain to the quality of service provided by USPS and that which pertains to package delivery. But here's some of the evidence that these people ignored:

Here's a 2001 press release from the FedEx archive saying much of the same thing:

This next source is an internal USPS audit, dated May of 2010 regarding the same contract with FedEx. However, it pertains to only one aspect of the contract, in mostly the eastern part of the country and the losses incurred over a two-year period:

The 2001 FedEx press release and the 2010 USPS audit conflict on the matter of who sorts the mail. Of course, it's possible that "sorting" and "pre-sorting" are two separate functions. So much of the very service that Shiva, texmaster, serlak & Patrick complain about has actually been outsourced & handled by FedEx since 2001! The press release states that FedEx projects billions in new revenue, while the audit exposes losses attributed to the same arrangement! Forum members also go on about how the postal service can't compete. FedEx is allowed to place their drop boxes at post office locations all across the country! That's not competing, that's capitulating!

 

more legislated transparency from big businesses will take care of the tacits. if government has access to their expense accounts, profit margins, and other useful business information it can create a competitive USPS designed to lower private market prices in the postal/shipping industry to a fair level for consumers

walmart is a bad example, they export slave labor and force americans to accept non living wages

if government could nationalize a competing business in that industry or set price controls their business model would be ruined or forced to improve for a more superior and moral model.

 

No my friend, the very definition of tacit makes that an impossibility. Planners wouldn't know which information to use, which is useless and even worse, they have no idea what information to look for. You simply can't replicate the dynamism of a market through planning except on small scales (islands of planning), which firms within a market do, but even they are beholden to good ole' supply and demand.

This is why the few socialist I know, still embrace the market, but detest wage-labor and exploitation. Unlike most on this forum I don't demonize you for your particular political alignment, but just wish you'd refine it a bit more so you're at least in step with modern socialist thought.

You may enjoy this : http://www.paecon.net/PAEReview/

See: Economic Calculation Problem -- Even with the a computer with unlimited computing power (this doesn't exist), no one can aggregate enough information to replicate market forces. Your championing an agenda that is already done and dusted, it's akin to supporting flat earth groups. The arguments are over on this matter, and a consensus was reached, planning (and as a result price controls) are inefficient and fail to address the issue.

I've already shown you why this is not possible, but moreover, it's not only impossible, but not even desirable. The end result is you make worse the situation of the exact people you're trying to help.

 

california did price controls on the electricity industry and was operating wonderfully until Enron and other businesses sabotaged government progress.

if USPS were nationalized and government had access to the private business information of its major competitor fedex it could certainly regulate market prices in a fair manner. USPS does not operate to profit but to break even, so each year as the government receives taxes on profits from fedex it can adjust prices accordingly for its nationalized company and effectively set market prices for fedex.

it would be against governments interests to ruin the private market they pay alot of taxes and that is not what is advocated, but it should work for the people by controlling private market profits. privacy laws for businesses are one of the big hinderances to government setting efficient price controls in the market. the market is very simplistic and is often over rated and over estimated to further the interests of profiteers, that is why many people fell victim to the mortgage scam.

 

Electricity could easily be a public good and as a result ought to be run by the state, on the contrary California also has absurd prices for electricity compared to my state where power companies are investor owned -- ie those of use who pay them also own them, but aren't public and provide some of the highest quality and lowest price utilities in the state. Sort of debunks your mythos you adhere to.

You're still missing the point, even if they invaded too every book and ledger, kidnapped every employee and tortured them until they divulged every secret, it still wouldn't be enough. This is the issue Hayek outlined with information. Planners don't have it, can't acquire it and have no idea what to even look for. This is not an issue of information gathering, but an problem with it being tacit (go look that up before you misuse it again)

Wrong, wrong, wrong wrong wrong WRONG! And there's not a single economist on this planet that would agree with you on that. It's hugely and infinitely complex with variables that can't be seen known or tested. To suggest that any market is simple is a major reflection of naivety on the subject.

 

the government has more experience running businesses than any other private business in this country, USPS is one of the oldest ever and still in operations

government did a very good job till now because house republicans attack their generous benefits

democrats could surely run an efficient market, california lost price controls of the electricity industry because of the private business Enron manipulating and speculating the short term market prices for electricity which collapsed it. Enron or Madoff is now in prison for other abuses

 

Fortunately they never had to be profitable to remain in business, since that's almost never happened.

Are you even listening? No one, democrats, republicans, martians, super computers, NO ONE, can "run" a market, the behavior is emergent and cannot be replicated. Clearly you've ignored the links I provided.

 

china runs their markets, they have nationalized competes that compete with private companies and their model is successful as they are the strongest emerging economy

if USPS were nationalized and run by democrats it would run that particular industry of delivery by setting good prices in the market for the consumers as well provide good jobs with generous benefits that private companies would have to compete with and lower their profit margins to reasonable levels instead of greedy levels.

 

Please, extrapolate from your own experience of starting and growing a busienss to how thois statement even makes sense. Your experience of starting your business will help you understand fixed and variable costs as well as having employees who cannot multi-function because no doubt you also suggest unions in this liberal utopia. Again, draw upon your personal experiences and you will see that perhaps your post is a bit......"misguided"

 

FedEx reported earnings of $1.75 per (diluted) share for 2011. That's a return on investment of almost 10% based upon current FedEx stock prices.

UPS is projected to have up to a $4.35 per share return on investment for 2011. That's a return on investment of just less than 6% based upon current UPS stock prices.

How does that stack up to claims of "greedy levels" by any standard. FedEx is certainly showing a fair return on investment while UPS is actually sub-par related to what investors would expect. By no criteria can either of these corporations be considered greedy.

 

The United States Postal Service (USPS) is one of the few government agencies explicitly authorized by the U. S. Constitution. Prior to 1971, the U. S. Post Office was a Department of the U. S. Government. In 1971, the U.S. Post Office became the U.S. Postal Service, an independent agency of the United States government.

However, the term "independent" is somewhat misleading because Congress retains control of certain major aspects of the Postal Service. The present-day status of the USPS is explained by market forces and political forces. The USPS is controlled by Congress; and Congress is controlled by corporate and other financial interest groups.

Small, present-day, out of the way post offices may be of value to some people; but they are of no value to corporate and business interests. They will be closed. Likewise, mail delivery on Saturday will be discontinued. After all, there is no compelling need to deliver junk mail on Saturday. FedEx and UPS are independent organizations; the U.S. Postal Service is not. It should be; but it's not!

 

Can you explain why it is that you believe that postage and shipping rates would increase, rather than decrease?

 

There's something to that. Many governments have been overthrown by unhappy, unemployed veterans. They are, after all, trained to kill. This doesn't make me supportive of the USPS, but it does make sense. So long as they "go postal" on each other and not the rest of the populace.

 

The USPS also has a monopoly on first and third class mail service.

 

How do you calculate what are "good prices"?

 

Topquark wrote: "...the USPS is subject to congressional control on large aspects of its operations. In other words, the USPS is not an "independent agency". The USPS, like Government itself, has become a tool of corporate and business interests."

Exactly! They're ignoring that fact because it trashes their "government can't run anything" dogma! You'll get a kick out of this one: FedEx delivery driver tosses package (a computer monitor) over fence, rather than ring the gate. http://finance.yahoo.com/news/fedex-addresses-tossed-monitor.html

 

I agree, also the corporatons influence of financial and ad industry makes great use of the USPS, as is evident by the junk mail we get on a weekly basis. If the financial and ad industry went through the USPS, it would break heavly into their profits.

Come to think of it, majority of the USPS delivery is junk mail and solicitaion from financial institutions and insurance corproations. Hence, nothing more than an ad distribution agency with a small side buisness of passports, and pacakage delivery.

 

Fedex has a ground system which exploits workers with no benefits and forces them to work 60 plus hours a week as independent contractors and that contributes to their profits

they are approximately making 4 percent more because of that exploitation, UPS has the better model because of its generous benefits and treatment of its workers, USPS has the perfect model.

that is why the return levels by UPS is not greedy, investors are perpetuating this greedy structure the financial markets have been operating on greed for a long time and it boiled over in 2008.

 

employee satisfaction

 

Actually it's "value to the customer" because if the customer does not receive value the enterprise fails, period. If the enterprise fails then there aren't any employees.

 

Serlak asks: Can Fedex send a letter for 47 cents?

No, it's not possible to do for $0.47 the same thing FedEx does for $4.70. But this doesn't mean the FedEx rate is "too high". FedEx and UPS provide dependable mail and package delivery services at reasonable rates.

However, the Postal Service is required by law and Congressional exploitation to deliver junk mail and provide other services to corporate America at below market rates. This represents a government subsidy for commercial interests. Such interests are known to be tenacious as well as greedy.

Nevertheless, there is a fix for this and it doesn't require the exclusion of Congress from postal affairs. It does however, require the extrication of corporate and commercial interests from Congressional affairs. The liberation of Congress (and the Postal Service) from servitude to Wall Street overlords is long overdue.