Postal service wants $75 billion

The Postal Service, which is, for the most part, a government-mandated disaster, wants $75 billion for corona virus relief.  The reality is that USPS was pretty sick before it got hit with the virus:
  • Heavy unfunded-pension obligations
  • Strange, mandated pricing
  • Poor allocation of costs
  • Outdated equipment (look at the delivery vehicles – Grumman LLV = long life vehicle (appropriate) made 1987-1994)
  • Huge competition that knows how to take advantage of the mandate that USPS deliver to every address
Reform is long overdue!
 
USPS, and all air-freight shippers, are seeing wildly higher costs.  With fewer passenger planes in the air, a lot of airlift capacity is gone.  Airfreight is normally 32% of capacity utilization (or ~20 tons on a 747) – so this scarcity has driven:
  • Costs up from $3 to more than $10 per kg
  • Airlines are stripping out seats and putting cartons in the overhead bins
  • Airbus is making cargo pallets that slide into seat tracks