From Quora.com
Question:
It's long been rumored that Amazon would buy FedEx and/or start same day shipping in parts of the US. Would USPS give them the ability to do both and dominate even more of the "last mile" supply chain so critical to e-commerce vendors?
Answers on Quora to date:
Isn't the USPS mandated by the US gov. to get the mail to every citizen ?
If you privatize the USPS, they will not endure the costs of mailing stuff to people in remote locations. I guess this would lead to something similar to insurance where the amount you pay depends on your location. On one hand, if you live in a major city you will pay less thanks to increasing returns to scale. On the other hand, if you live in a forest, and if your closest neighbor lives 10 miles away, you will pay more because of the cost of getting one piece of mail to you.
Its definitely an inefficient competitor and if not for government support would have been acquired or liquidated years ago. That being said, I don't see it happening anytime soon -- government doesn't seem to be too worried about programs that can't fund themselves; however, as physically mailing items becomes more and more a thing of the past, the government could very well believe this service to be minuscule and a drain on the public coffers.
Time will tell.
I can't come up with a single reason not to be long UPS and FEDEX.
Also, that Brenda chick is retarded.
Remember, if it were a private company USPS would rank 35th largest (http://about.usps.com/who-we-are/postal-facts/welcome.htm).
None of the arguments against privatization hold up well.
I understand Germany, Netherlands, and Japan they have privatized postal services.
Isn't the USPS basically kept afloat by direct mail advertisements at this point?
Rutgers Univ. Michael A. Crew et al. "Privatizing USPS" citation:
For PE, this is too big. Even if you were to put USPS into bankruptcy, it would be beyond reach. For Warren Buffett maybe not too large, but no logic.
Why would ANYONE buy USPS?
USPS is the only area of the government mandated by the Constitution to fund its own budget, and until recently, policians have diverted excess cash from it to other programs. More likely the USPS will adopt a lot of the approach used by FedEx, etc. Aside from a mountain of practical concerns, too many people have a stake in the organization for the gov't to be able to just kill it or sell it off easily, but hey, they're privatizing prison so anything is possible.
As for Amazon, their sense of Godliness is going to come under assault as talks of having them pay tax like any other business are being pushed forward. I like free stuff like anyone, but a large part of their advantage is gov't support. At this point, it's unlikely they'll get a free ride forever.
Privatization of Mail Delivery (Originally Posted: 11/12/2010)
So the Pony Express lost $8.5 Billion dollars this year. This comes after losing $3.8 Billion the year before.
http://money.cnn.com/2010/11/12/news/economy/postal_service/index.htm
With all the talk of waste in the government, I am shocked that the Postal Service isn't brought into the discussion more.
What if the USPS were to sell their assets for say, $100 Billion dollars, and let a real company with real management that has real business experience run this organization? With trucks, employees, computer network, and offices on every corner, the infrastructure is in place.
With facebook, twitter, email, and text messages, the high tech world is no place for an antiquated dinosaur like the Postal Service. Americans just aren't using the USPS to communicate. And with competition in the form of Fedex and UPS, it's embarrassing to see how hard the Postal Service has fallen. They had every advantage in the world.
How is it that operations like Fedex and UPS are able to grow and be profitable in such a short time frame? I will tell you, because they are not associated with our government. I've been wanting to rant about this for a while but I don't want it to turn into another anti-Gov't thread. The retirement packages inside of the Postal Service are gross.
Would no deliveries on Saturdays really solve issues? Raising the price of stamps 2-3 cents is also not the answer. Stamps could be $1 and they'd still find a way to lose money. It's time they cut the fat inside the USPS and got rid of the parachutes. Bring in real managers to run the joint, not former mail deliverers. It's also time to sell some branches. Maybe change the hours they are open inside. We don't need a branch on every street corner, isn't that why we've got mailboxes?
America's first Postmaster General Ben Franklin would be ashamed to see our government workers sucking on the USPS like leaches. What do you monkeys think? Maybe KKR and the boys will swoop in and buy the assets, cut the fat, and re-release it as a lean, mean, mailing machine. Maybe, just maybe, our new congress can cut workers and get rid of ridiculous pay packages. But then again, that's too glaringly obvious.
I also recently read that The American Postal Workers Union had to extend its internal election after thousands of ballots appeared to have gotten lost . . . IN THE MAIL!
IROOOOONNYYYYYY.
http://www.foxnews.com/politics/2010/10/07/postal-union-election-delaye…
There are some places in the country (say the entire state of West Virginia) where it is unprofitable to deliver mail. It is vital those services continue, even if they are run by the USPS at a loss.
I agree. I'm sure states like Alaska, the Dakotas, Montana etc are not profitable. However, in more populated areas, multiple post office locations are unnecessary.
Exactly. Additionally, they have to keep prices low enough so that low-income people can mail stuff--especially since these people are less likely to have email, blackberries etc. Raising prices may (or not) be more profitable, but doing so would effectively deny mail service for some people.
Bottom line is there are too many social issues to privatize it. If privatized, the gov't would still have to regulate the shit out of it, mandating low prices and service to all areas of the country. Not much would actually change.
Just for shits and giggles, here in NYC I live on 69th Street and I have a post office on the corner of 68th Street. I mailed an invitation to a friend that lives on 72nd Street. It took TWO, yes TWO, weeks for her to receive it. Can one explain how the fuck that is remotely possible? I literally could have walked three blocks to drop it off.
She couldn't come up with a better excuse than the mail took 2 weeks for delivery?
the sad thing is that the postal service is one of the MOST EFFICIENT gov n-titties
"When you control the mail, you control.... information"
Conflict of interest?
what does this have to do with trading :P lol
It's not run to make money, just like public transportation that often has a loss the whole point is to provide a service that +90% of people can have access to.
I'm sure if the govnt didn't want to loss money on it, they could very well cut costs by closing a lot of post offices, laying off workers, and upping the prices drastically but I don't even want to fathom what the domino effect of that could possibly be.
I'm sure the government is just thrilled to lose money every year. I'm not saying eliminate the service, I'm saying cut the fat. It can afford to layoff workers. It can continue delivering to Auntie Em in Kansas, just get rid of the BS benefits that government workers believe they are "entitled" to.
So it's the union that's killing it? It's one thing to have an agenda, it's another to have an analysis that isn't really substantiated by anything but political propaganda.
I'm sure that's a variable...but pricing + delivery of services on Saturday + non-profit structure + providing services to even the poorest neighborhoods + etc. variables probably creates the problem.
The Next Breakout Bank: USPS? (Originally Posted: 02/21/2014)
Was surprised nobody has posted on this topic yet, so I thought I would throw it up here on the forum.
In summary, Senator Elizabeth Warren is seriously proposing that to address the impeding United States Postal Service bankruptcy, the postal system take a note from the history books and other countries and turn itself back into a bank. Millions of Americans are currently underserved when it comes to financial services and those uneducated ones are often at the mercy of loan sharks. Few want to privatize the USPS, though I a bet a few PE firms wouldn't mind tossing their hats into the ring. And this isn't the first time a banking structure has been proposed to maintain the public nature of the postal service.
But the debate is fresh.
So, assuming the USPS begins a banking division on January 1, 2015, who would you choose to run it, and why?
I'll go first and put out some fodder for the hecklers out there: Lloyd Blankfein, because it would be epic.
I'm envisioning this would be a combination of the regular USPS added with the DMV and a random public transportation ticket office.
They should force Jon Corzine to run it, after they put the SOB in prison
I am already trading credit derivs at the USPS IBD... I'd choose Jordan Belfort to run it, LOL
Thanks, but no thanks. I will pass.
Well, Royal Mail (British postal service) IPO was oversubscribed last year.
I can only imagine what manner of unholy fuckery this would be. I feel like the word corruption wouldn't even come close to describing the potential here.
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