December 30, 2013

Bloomberg Businessweek: Somehow, UPS-Fedex Christmas Snafus Make the U.S. Post Office Look Good

Bloomberg Businessweek and others are trying to capitalize on the difficulties United Parcel Service and to a lesser extent Fedex had in delivering packages in time for Christmas to claim that the U.S. Postal Service is coming out of it smelling like a rose (“An Unlikely Star of the Holiday-Shipping Season: The U.S. Postal Service”).

Not so fast, people. Let’s be extremely generous and take it as a given that the Post Office didn’t have any late arrivals, and that it deserves props for delivering 75,000 packages on Christmas Day. It’s hard to make an apples-to-apples comparison, but based on the quoted number of packages UPS planned to deliver on Christmas Eve, the private company’s package volume, particularly its air package volume, dwarfs that of the Post Office, and would overwhelm it if it tried to pull off what UPS routinely does:

Santa can deliver millions of packages in time for Christmas, but apparently, UPS can’t. That’s why you can expect mega-retailers like Amazon and Walmart to eventually take delivery into their own hands.

The delivery company with all those brown trucks expected to ship about 7.75 million packages through its air network on the Monday before Christmas, and though we don’t know how many UPS actually handled, The Wall Street Journal says the number far exceeded the company’s capacity.

As I understand it, the Post Office has farmed out much of its air delivery business to Fedex, so it probably doesn’t have the capability to even try to do what UPS and Fedex routinely pull off with air shipments each night.

One online lefty publication went so far as to claim that the Christmas problems show that “Republicans (Are) Wrong About Killing the Post Office,” and that “The private sector can’t do it better.” My understanding is that the GOP doesn’t want to “kill” the Post Office, but instead wants to privatize it.

There’s one other annoying detail in that kind of comparison: UPS and Fedex are profitable, while the Post Office lost $5 billion during the fiscal year ended September 30. While that’s better than the $15 billion it lost the previous year, that’s still a long way from breakeven, let alone profitability, and exposes taxpayers to periodic calls for various bailout-like measures..

Cross-posted at NewsBusters.org.

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