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I Heart the Post Office

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I had to mail a package today. I was late to do it, and busy, and there's a Fed-Ex/Kinkos storefront steps from my office. Compared to the post office, mailing my package was at least twice as expensive. But the real fun came while figuring out which speed to mail it at. I asked the guy at the front for their "standard shipping." I explained that it wasn't time sensitive. He steered me directly towards "Express Saver" shipping. "Saver," huh? That sounded good. He'd even give me the envelope for free, he promised. A deal! He rang me up. A shade over $15.

Huh?

Turns out there's also a "ground" shipping that he didn't mention. That was "only" $8, plus a bit for the envelope. The salesman had been steering me towards a costlier item that I didn't really understand, which is sort of what you'd expect, given that he's in business to make a profit. But I'm not shipping things to help him make a profit, and don't want to pay $15, or even $8. Good thing I have a public option to choose in the future.

Photo credit: By Chris Warde-Jones – Bloomberg

By Ezra Klein  |  October 9, 2009; 4:55 PM ET
Categories:  Health Reform  
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Comments

I have never been to a FedEx that wasn't an absolute disaster, and there's always been something negative to take away from my FedEx trips--whether it's being ignored, or made to wait for no apparent reason, or overcharged, or short-changed . . .

By contrast, I have actually had really positive experiences shipping things using the USPS. I think the main problem with the USPS is inexperienced customers. People who don't send a lot of packages don't know what they're supposed to do, so they have to get walked through all the options, told where to put the labels, helped with taping, etc. That slows things up, and leads to cranky people in line . . .

Posted by: bucky_katt | October 9, 2009 5:08 PM | Report abuse

Right on. The bigger picture is that's an example of the real world of "consumer choice" that we're all supposed to salivate over. We're given a dizzying maze of choices on everything from oil change services to phone plans to, yes, health insurance, under the guise of the more choices, the better. Problem is, as we too often discover, we're either cynically and calculatingly steered into the choice that's right for the seller, or we get so confused we end up making what turns out to be the wrong choice. But, by God, we got to choose.

Posted by: tomzee1 | October 9, 2009 5:14 PM | Report abuse

"Good thing I have a public option to choose in the future."

You mean the Post Office, the one with the highly politicized pricing structure? The one with negative net income in 2007 and 2008? The one with "Capital contributions of U.S. government" on the financial highlights page of its annual report? Yeh, that's about how the government option would work in health care.

Posted by: ostap666 | October 9, 2009 5:27 PM | Report abuse

Dude, you do realize it's actually illegal for private companies to compete with the USPS in the market for non-urgent First Class mail, right? If the package consisted of documents (and therefore counted as a letter), it is *required by statute* that it cost at least twice as much as the postal rate.

Posted by: JulianSanchez | October 9, 2009 6:19 PM | Report abuse

The Post Office doesn't offer you Media Mail or list it in the options unless you specifically ask for it. It's a bit weird for an organization with so many statutory obligations to be trying to turn a profit as well. But it is better overall for these purposes, yes.

Posted by: Minivet | October 9, 2009 6:33 PM | Report abuse

Always UPS, never FedEx. But always always remember..."if it fits, it ships" from the good old socialistic USPS. Best deal going.

Posted by: scott1959 | October 9, 2009 6:49 PM | Report abuse

I just used the USPS today, the woman there saved me 10 dollars by giving me the packaging for free and suggesting I weigh it and send it instead of use the flat rate packaging (which I had just seen advertised on TV). More power to the Post Office, my favorite day to day face of the government.

Posted by: PaulW99 | October 9, 2009 7:00 PM | Report abuse

Also an interesting example of the importance of "plain vanilla" products like that being proposed in financial services reforms. It's always a good business strategy to make product choice maximally confusing because you're likely to err on the side of a more expensive but more certain outcome (even if the product itself isn't certain at all).

Posted by: kordsmicah | October 9, 2009 7:36 PM | Report abuse

Sorry, but FedEx is the best company I deal with. Not just shipping company -- company. It's a very, very well run organization, and if I need reliability, they are always worth the extra money in my book.

Why? 'Cause they can TELL you what's happening with your package. The postal service and UPS have little to no idea exactly where your package is.

I have never had a FedEx shipment arrive late or damaged. I have been able to intercept packages when the scheduled delivery was going to be on a day when my office would be closed. No WAY I can say that about the "public option" of USPS.

It ain't cheap. And a lot of the time, ground delivery is fine. But for mission-critical mailing, you're a fool to use another option, except where required to use that option by law.

Posted by: mattmdavis1 | October 9, 2009 8:09 PM | Report abuse

Klein rides the short bus, again.

JulianSanchez is correct. Federal law mandates direct competitor's prices be double that of the USPS.

Also, the USPS is exempt from paying most taxes, gets favorable treatment not available to private companies in other ways, and is up to its eyeballs in debt.

The USPS is headed for fiscal disaster, and it's going to happen on the taxpayer's dime.

But since the USPS is an artifact of the corrupt state, Klein "hearts" it (a fact in itself rather pathetic.)

Posted by: msoja | October 9, 2009 10:17 PM | Report abuse

This comparison seems inapt. Make that the post. USPS is continually in the red and requires extensive taxpayer subsidies. You can afford to offer a cheaper service if you can dump your losses on the taxpayer. No private company can compete in such a scenario. I think that is the principal fear of the insurers.

Posted by: conrad5 | October 9, 2009 10:21 PM | Report abuse

You people latching onto the "illegal to compete with USPS" meme are idiots.

Name the company that will commit to delivering a document to any address in all 50 state in under a week with 99.9% reliability for $0.49.

There is none, yet that is an essential service that ties our country together in an efficient system that encourages everyone in the US to participate fully in the economy. Everyone in the US can cheaply and reliably transmit information, commitments and payments, transacting business no matter where they are located.

If FedEx wants to sign on for that, we would take that deal in a heartbeat.

We know Fedex' likely response: 1)$3.00/letter. 2) 50 mile radius of top 100 airports in lower 48. Quadruple the price everywhere else.

But you don't want to think that through, do you? You just want to complain about "da gummint."

Posted by: Dollared | October 10, 2009 2:27 AM | Report abuse

If you could get some think tank to write a paper that shows the cost of "shipping stuff" is rising at greater than the rate of GDP I am sure we could ask the CBO to write a paper that shows that in 200 years "shipping stuff" costs will consume the entire federal budget.

Then we could have a "shipping stuff" reform plan.

Posted by: cautious | October 10, 2009 3:27 AM | Report abuse

The name "Federal Express" obviously implies a relationship with the federal government. "UPS" is also extremely similar to "USPS." If the USPS was so horrible, the private companies would have tried to distance themselves from the government service instead of adopting names meant to exploit the USPS's reputation for reliability.

Posted by: bwwww | October 10, 2009 10:17 AM | Report abuse

--"Name the company [...]"--

That's not an argument. It's merely a call to review Bastiat's "Seen and Unseen", again. The USPS has been given (by force of government) certain privileges, and you can't "see" what the Post Office has displaced, i.e., that which would swoop in to fill the void were the Post Office expunged, or that which would replace the ungainly thing were people free to compete with it on even terms. And, without a doubt, one of those things would happen, were simple freedom given any shrift in the matter. Economically, what you can't see are the numerous hidden subsidies given the Post Office, some in the form of taxes imposed on its competitors, others as simple as the claim of exclusive "ownership" of all those "private" mailboxes that it didn't purchase. Have you priced a decent mailbox lately?

And why shouldn't mail to remote locations be priced differently than that which merely goes across town or down the block? I freely chose to live rather far out in the country, on a dead end street, too boot. Why should my mail service be subsidized by city dwellers? And how do UPS and FedEx manage to pull in my driveway as often as they do? And further, why do you assume that having the short, densely packed route customers subsidize the rural, dead end customers is more efficient or that it somehow saves costs somewhere? Economically, there is no free lunch. There isn't some magic going on down at the Post Office. It's just that people (see Klein) choose to ignore, or can't be bothered (because it contradicts their tiny world views?) to look for that which isn't obvious. In other words, they fall for the various tricks of government, seduced by the practiced bloviations of politicians and the sly complexities developed over decades of political maneuvering to hide the real costs of government endeavors and usurpations. Isn't it about time people grew up and left the quaint fantasies of forced altruism (a contradiction on its face) behind?

Posted by: msoja | October 10, 2009 12:41 PM | Report abuse

--"private companies would have tried to distance themselves"--

That's an interesting assertion, speaking more to the idea of the gullibility of the masses than anything else, I daresay. Do you suppose an awful lot of people are fooled by the association? Enough to base a business on? Or would that be akin to trying to raise K-12 government school test scores in Philadelphia by forcing more children to eat breakfast?

Posted by: msoja | October 10, 2009 12:53 PM | Report abuse

Julian Sanchez & MSOJA, I do not believe a single word of your claim that private shippers are required by law to charge
twice that of the USPS.

I challenge you to cite the law and/or otherwise document your claim.

Posted by: seerrees | October 10, 2009 1:23 PM | Report abuse

Would you believe new regulations mandate a rate SIX times that of a first class letter?

And will an FTC report do? It's a PDF.

http://www.ftc.gov/os/2008/01/080116postal.pdf

Page 24 of the PDF or page 18 of the FTC document:

The ability of private competitors to provide express service derives from USPS regulations suspending the PES for “extremely urgent letters.” A carrier can qualify for this suspension of the PES based on the timeliness of delivery. Specifically, the USPS allowed private carriage of letters when they were delivered within 12 hours or by noon of the addressee’s next business day, but “only if the value or usefulness of the letter would be lost or greatly diminished if it is not delivered within the set time limits.” Prior to enactment of the PAEA, a carrier also could qualify for this exception if “the amount paid for private carriage of the letter is at least three dollars or twice the applicable U.S. postage First-Class Mail (including priority mail), whichever is greater.” As discussed above, the PAEA codified this suspension of the PES to be at least six times the current charge for the first ounce of a single-piece first class letter ($2.46), and it also allows private carriers to deliver letters that weigh 12.5 ounces or more.

//end cite

PES stands for "Private Express Statutes" which govern the USPS.

PAEA is the Postal Accountability and
Enhancement Act of 2006, which refined many Post Offices regulations and operations.

The FTC report footnotes point to the relevant statutes.

Also, note that sending a non-urgent letter, say to Grandma, via FedEx is considered illegal in the U.S. Most people wouldn't do it because of the cost, but what if you wanted to, just for the heck of it? Well, you know, maybe agents of the government aren't quite that energetic as to be snooping through FedEx parcels... maybe.

Posted by: msoja | October 10, 2009 3:40 PM | Report abuse

Klein- you had better retract this one. Pure nonsense. You're paying tax dollars to subsidize the delivery of what is about 95% junk mail (as measured by the trash delivered daily to my house in the WashingtonPost "shopping guide" atrocity, various catalogs, political mailers from candidates, and other assorted deceptive crap that go straight into the recycle bin). I need the gmail spam filter turned into a combo mailbox-shredder.

The public "option" in mail is a forced bending of the rules to keep competitors out, as many above have observed.

As to the particulars of the sales experience, I am offered the upsells of insurance and tracking EVERY SINGLE TIME I ship a package at the Post Office, they do hide the media mail option often- you can't even select it on one of their automated shipping machines in the POs. I print my FedEx and UPS stuff at home, and they sent me a hill of shipping materials.

USPS = not worth it.

Posted by: staticvars | October 11, 2009 1:23 AM | Report abuse

I ordered a few thin paperbacks (technical books) - maybe a couple of pounds with packaging - from Amazon and had them sent USPS to my office by express mail. When they didn't show after five days I went on-line and checked the tracking number - it showed "delivered." I asked our mail room where they were - the guy told me, "this happens all the time - the website shows 'delivered' when the item reaches the local distribution center, but it's up to the mailman to get us the package and he takes a few days." It took the mail carrier four more days to deliver the package - nine days total. No more USPS for me.

Posted by: Bloix | October 11, 2009 2:19 AM | Report abuse

"The USPS is headed for fiscal disaster, and it's going to happen on the taxpayer's dime."

You could say the same about Wyoming, or any of the big empty federal-welfare red states where glibertarian dunces like msoja wish they could locate their compoounds. And it would be those big, empty red states that suffered more from a pure free market that priced mail delivery based on geography, not those evil urbanites.

Posted by: pseudonymousinnc | October 11, 2009 3:34 PM | Report abuse

"You're paying tax dollars to subsidize the delivery of what is about 95% junk mail"

Really? The USPS is subsidized by the Federal Government?

Posted by: callingalltoasters | October 11, 2009 4:22 PM | Report abuse

msoja--
Thanks for the link, it was interesting reading.

But... so FedEx and UPS are required to charge at least $2.46. But they are not required to charge six times what the USPS charges for *equivalent services* (e.g. next-day delivery). Since they are restricted by statute from providing competition for the services that would possibly be in this price range, they are not hurt by this pricing restriction.

Anyway, if you go on to p. 64, you get the $$$ quote: "Based on the estimates above, the USPS’s unique legal status appears to cause it to suffer a net competitive disadvantage relative to its private competitors."

Posted by: callingalltoasters | October 11, 2009 4:42 PM | Report abuse

I've grown to enjoy the USPS's services and price. Use FEDEX when the advantages to my business are obvious, but most of the time they are not worth the inconvenience (which is why we now have FEDEX/Kinko's). In my opinion, the BEST thing FEDEX does for us is provide a competitor for the USPS, encouraging them to improve services.

Posted by: davemaz | October 11, 2009 7:19 PM | Report abuse

Klein, are you seriously making an argument that we need a public option...because you're too dumb to understand FedEx pricing schemes without being spoon-fed?

Sheesh.

JulianSanchez's 4 lines are a lot more cogent than your two paragraphs... per usual.

Posted by: enoriverbend | October 11, 2009 10:50 PM | Report abuse

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