Why Isn’t the U.S.Postal Service Profitable?

By Paul Johnson, President CMS – Complete Mailing Solutions

“Have you ever wondered why the USPS isn’t profitable?”

What if Congress passed a law requiring businesses to prefund employee healthcare and pensions for 75 years in advance? Can you imagine how that would impact your company financially? It’s interesting that Congress requires 100% funding for 75 years in advance for the USPS when,according to The Motley Fool,the U.S. Government is only 42% funded.

But, wait, there’s more…

  • What if you couldn’t increase your pricing based on changing market conditions (such as rising fuel costs or competitive pressures)?
  • What if you were required to distribute your goods/services to a broader market, even if that market was unprofitable?

If you’re like most executives you’d say: “No way! We can’t survive in that environment!”

Welcome to the Postal Service! These are just a few restrictions that the USPS must grapple with. Each of these individually would have a significant hit to the profitability and sustainability of a company. Collectively, they’re nearly untenable.Profitability image shown by magnifying glass and chart
Remember, the USPS does NOT receive and revenue from the American taxpayer, their only source of revenue is for products and services!
And the list goes on:

  • They cannot add a fuel surcharge to pricing (as FedEx and UPS can) to maintain profit levels.
  • They are required to provide service to people and businesses in remote areas even though it may be highly unprofitable. In fact, the USPS delivers packages for UPS and FedEx in geographic areas UPS/FedEx consider unprofitable.
  • Although the USPS is not a government entity, it is governed by Congress and the Postal Rate Commission (PRC), which restricts potential avenues for expansion into other products and limits competition with other companies (such as UPS and FedEx). Congress has been influenced by competitors to get the USPS to abandon new products. Here are some examples cited by The Motley Fool:
    • Plans to develop an online payment system in 2000 were scuttled when the Internet industry cried foul.
    • Public copy machines.
    • In-store sales of phone cards and money transfers.
    • Selling postal meter cartridges (Pitney Bowes objected).
  • The USPS is required to invest exclusively in government bonds while private companies can invest in a wide variety of securities to improve profitability.
  • The USPS is forbidden by law to lower prices to get more business.

There is much criticism of the Postal Service for losing money. However, without unreasonably burdensome restrictions, it would likely be a different story. Not only do many of these restrictions not make sense, they directly undermine the success of the USPS. Many would have us do away with the Postal Service altogether. Yet, they provide a tremendously valuable service to our country across a huge geographic expanse and at very low rates. Services in Europe that are comparable to our
first class
delivery, cost at least two to three times more than in the U.S. Many projections around elimination or privatization (full or partial) of the Postal Service paint a picture or greatly increased prices and decreased service levels and quality.

So, what’s the answer? How about if we consider a simple solution? What if we just got out of the way (by relieving the USPS of unnecessary burdens) and let them run their business as a business?

Intelligent Parcel Lockers

…the perfect solution for secure, centralized package delivery and pickup

By Paul Johnson, President CMS – Complete Mailing Solutions


Delivering a high volume of packages to people who are dispersed across large areas such as colleges, apartment buildings or corporate campuses can be costly and can quickly overwhelm your resources. In these situations, providing a secure and convenient way for recipients to receive packages in a cost-effective manner is a daunting challenge.
What if you could provide 24/7 access to packages in a convenient location where people can safely and securely retrieve them? If your organization is struggling with this issue, check out Packcity Intelligent Parcel Lockers from Neopost. These automated electronic locker systems securely store packages for easy recipient retrieval and package returns. They provide a valuable service to residents and consumers and substantial cost savings and reduction of liability to organizations. In some cases, they can even be a profit center.
PackCity Parcel Lockers

Packcity Intelligent Parcel Lockers provide:

  • Reduced storage requirements -large storage spaces are no longer necessary. Slimline lockers can be placed in hallways or other easily accessed areas – even outdoors!
  • Customization – lockers can be configured to your needs and incorporate your branding.
  • Security – packages are stored safely until retrieved.
  • Accountability – every drop off and pickup is automatically logged electronically providing 100% chain of custody tracking.
  • Labor reduction – packages are delivered centrally rather than distributed to multiple locations.
  • Reduced handling – eliminates the need for multiple deliveries and re-deliveries. Signatures are captured upon pickup and logged into the system for tracking purposes.
  • Convenience – 24/7 access allows recipients to retrieve packages at a time convenient to the them.
  • Flexibility – recipients are automatically notified by email or text that their package is ready for pickup.

All of this is accomplished in three easy steps and returns are just as easy.
Packcity Lockers Process
Click here to see Packcity Parcel Lockers in action!
Packcity Parcel Lockers are the most convenient click and collect solution for deliveries at residences, retailers, universities, corporations and other locations. They save time for building owners, managers and retailers, while providing a convenient, safe and valuable service to residents and consumers.
To explore how Packcity intelligent parcel lockers can benefit your organization, contact Paul Johnson at 303-761-0681 x211 or email pjohnson@cms-colorado.com. In the meantime, you can download a Packcity Parcel Locker brochure here.