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Tuesday, Sep. 16, 2014

Postal office at loss to explain losses

Wednesday, December 5, 2001

The Postal Service just released their annual financial statement and, sure enough, they lost $1.7 billion last year. But that's not the important news as far as I am concerned.

Not by a long shot. Nope, when asked why the Postal Service had lost so much money, the chief financial officer blamed it on "the declining economy and increased competition."

Now folks, I'm not the best business mind in the world but every business in every hamlet of every size is always impacted by the economy and competition. That's the absolute first rule of business. Of course they're impacted by the economy and the competition! What else is there? Bad karma?

Here's the problem (and I hope my friends at the Sikeston Postal Center understand). The Postal Service spends too much money for the revenue received. Rule number 1. Spend less than you receive. The Postal Service had $65.8 billion in revenue but spent $67.5 billion. This is pretty fundamental business here. But not for the Postal Service.

Their solution? You guessed it. Raise the price of a first class stamp to 37 cents. Well how about cutting a couple of billion in spending? In an organization - any organization - of that size, there is waste. Cut the fat and leave the postal rates where they are. Eureka! You'll turn a profit.

Do you know why the Postal Service has competition? Because someone, somewhere figured out a way to do it cheaper or faster or more efficiently. Thus is the nature of the business world.

To put the topper on the issue of course, the Postal Service - like so many others - is also blaming the Sept. 11 tragedy for anticipated losses next year. Given the anthrax scare, perhaps they have a point but I doubt it. Like others they are looking to Congress to bail them out of their current fix.

The Postal Service has long been an easy target for criticism. I, for one, think they do an excellent job given the massive volume of items they handle on a daily basis. But when their top financial officer can't seem to arrive at a better reasoning for their losses, it makes you wonder if the top management isn't the problem. Seems like it to me.



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