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US Postal Sevice/The last monopoly. Their appointed rounds -- but at what price?

By Rushworth M. KidderStaff writer of The Christian Science Monitor, Rushworth M. KidderStaff writer of The Christian Science Monitor / August 1, 1985


Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. Herodotus. -- Inscription on the General Post Office, New York City PART 2 Outside, 40-foot tractor-trailers grind their way up to the 100 loading docks of the General Mail Facility -- a cavernous, quarter-mile-long structure perched beside the harbor in downtown Boston. There are no keys to the building: It is open day and night, seven days a week, processing some 6.4 million pieces of mail each day. Deep inside, a small group of shirt-sleeved employees sits at strange-looking keyboards. As letters fly past on the eye-level conveyor belts in front of them, they check to be sure the stamp is in place. Then they key into their machine the last three digits of the ZIP code. The whole operation takes seven-tenths of a second per letter.

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Transportation, sorting, timing, and personnel: On these issues the 39,000 post offices of the United States Postal Service (USPS) stand or fall.

And underlying them all is the bugbear of costs.

On one hand, of course, the USPS is wedded to improving its customer service -- an overriding concern of Postmaster General Paul N. Carlin. But in the labor-intensive mail business, improved service often means more employees -- and higher costs.

Striking the balance can be difficult. Postal managers remember the ill-fated March 1972 hiring freeze imposed by then-Postmaster General E. T. Klassen. Although his plan cut 33,000 workers from the payroll by late summer, it was followed by such poor service during the Christmas rush that Mr. Klassen was forced to abandon the freeze, throw cost-containment out the window, and endure a 1974 deficit that was 33 times as large as the 1973 figure.

This past year, in an effort to avoid a replay of Klassen's scenario, the USPS has been hiring steadily: The total work force has risen from 702,000 last October to a current level of 746,000.

The result: serious cost overruns.

``We've given an awful lot of attention to improving our service over an extended period of time and [to] absorbing an awful lot of volume,'' says Postmaster General Carlin ruefully. ``Now the time comes to bring [our] efficiencies into order.''

It's a tactful way of saying what others put more bluntly: that USPS costs are, as postal governor Peter E. Voss frankly says, ``out of control.'' Deficit

``The $500 million deficit shocks us,'' says Richard A. Barton of the Direct Marketing Association, referring to the size of the cost overrun estimated by postal management at the close of the fiscal year in October.

Already this year, postal officials say, the USPS has posted a deficit of $385 million. The figure is especially troubling because new rates were introduced in February. Conventional wisdom holds that the system should show a surplus in the early years of the ``rate cycle,'' before inflation has eroded the value of the increase.

Also troubling is the reversal of a pattern of recent successes: The last deficit ($588 million in 1981) was followed by three years of surpluses. In fact, the overall budget for the eight-year period from 1977 through 1984 is almost precisely balanced: $164.27 billion in total income, and $164.23 billion in expenses.

So is this current deficit a blip in a generally upward curve that, in the 15 years since the 1970 reorganization, has been climbing toward fiscal balance?

Or is this a portent of greater problems -- proof that the structure is fundamentally out of kilter and that the entire system is being driven into the ground?