Thursday, June 25, 2015

Too Big to Succeed

ack in the start of the financial crisis in 2008 we heard a lot about companies that were "too big to fail."  The concept, at a high level, was that if these giant companies failed two awful things could happen:  1) A lot of people will lose jobs and 2) It could kick off a chain reaction of other like-businesses to fail.  There's a lot of opinions about the pros and cons of this policy.  In the meantime, our government continues to approve mega-mergers at a staggering rate, as if giant companies are in a race to achieve "too big to fail" status.

In the meantime, I bring to you one of the best examples of "bigger must be better" failures:  The US Postal Service.  On May 8, 2015 the USPS reported an operating loss for Q2 of $1.5 Billion dollars.  Let me repeat: they lost roughly $1,500,000,000 in three months.  That's a pretty hefty number to chew on, but wait....there's more.  The cost of operating the USPS for the same three months was $18.4 Billion dollars.

Can't email the
Post Office in the 
USA, sorry.
Can email the
Post Office in
Pakistan.
The current population of the US (total number of USPS customers) is 318.9 million, ignoring for a moment the fact that kids under age 10 may not actually be customers) means that each human in the United States would have to contribute $237.07 each year to keep it afloat.  Now check your mailbox (the one outside) and tell me if that's a subscription service you'd pay for.  Most of my mail is flyers and junk that immediately finds its way into the recycling bin.  Critical bills come to email or are set to autopay.  Occasionally I might get a package sent to me by USPS, but most of them are from abroad, late, and undelivered, requiring me to pick them up from the surly people at the Cadman Plaza Post Office in Brooklyn, NY.  ...Who may also have lost it.  Hold times for USPS phone support run at about 20 minutes.  Want to email them?  Sorry, they don't have an email address.  Conversely, you can easily email the PakPost, Pakistan's Post Office, one click off the homepage.

The Post Office was once a major agency of the government and included a cabinet member position of Postmaster General.  And with good reason; at one point mail was delivered twice per day.  It was the main method of communication, and the golden age for this amazing organization that managed to hand sort, carry, and successfully deliver probably 10 or 15 times or more the volume of mail that is distributed today.  Infrastructure was invested in, more people were hired, logistics were refined.  But somehow, with less mail and more automation, the service is crappier than ever.  In short, the USPS is too big to succeed.  It's a failing corporation that has a taxpayer crutch, keeping it out of Chapter 11 on the basis of "Don't you like your mail carrier?" (mine, Theresa, is awesome by the way) and "It's an amazing historical institution that we shouldn't destroy." and "Getting mail is still important to many rural communities."

My parents live in one of those rural areas, and they need mail.  They can only get on the internet through dialup (yup, they use a 56.6 "baud" modem today to get an internet connection) because the infrastructure isn't there to deliver normal internet.  Imagine then if the telecom companies (love them or hate them) had the ability to spend an extra $73.6 Billion dollars on infrastructure?  That's an investment that would serve those ignored area, an infrastructure that would provide a meaningful service for years to come.  Now imagine that junk mail companies, the last major killer of trees outside of law firms, had no vehicle to which to send junk mail.  I mean, Fedex and UPS and DHL are hardly viable options.  Trees saved.  More vehicles off the road that were delivering dead trees.  Happier people, free of junk mail, living in a cleaner environment.

Let's shut this down, people.


--A

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