Tuesday, May 31, 2011

US Postal Service near collapse

My friend over at TYWKIWDBI commented on this issue today and linked to a rather extensive analysis of the problem at Bloomberg (excerpt below) via Neatorama. Below is an infographic produced by Microsoft chronicling the history of eMail - but one of the reasons for the USPS's distress.
Since 2007 the USPS has been unable to cover its annual budget, 80 percent of which goes to salaries and benefits. In contrast, 43 percent of FedEx's budget and 61 percent of United Parcel Service's pay go to employee-related expenses. Perhaps it's not surprising that the postal service's two primary rivals are more nimble. According to SJ Consulting Group, the USPS has more than a 15 percent share of the American express and ground-shipping market. FedEx has 32 percent, UPS 53 percent.

The USPS has stayed afloat by borrowing $12 billion from the U.S. Treasury. This year it will reach its statutory debt limit. After that, insolvency looms.
Click to enlarge

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