Amazon to Begin Sunday Deliveries, With Post Office's Help
From the article:<p>> The Amazon contract will be a much-needed financial boost to the Postal Service, which continues to bleed red ink as more Americans eschew "snail mail" in favor of email, instant messaging and social networks. The agency, which said it expects to lose around $6 billion this year, has been closing locations and has proposed ceasing Saturday delivery of many items to cut costs.<p>But the USPS is, operationally speaking, profitable; it makes about $400M in operating profit per year. So where does the $6B loss come from? It turns out that the overwhelming chunk of USPS expenses are due to a 2006 Congressional mandate that forces the agency to prepay for <i>75 years</i> of benefits.<p>In other words, Congress believes that a hypothetical 30-year-old USPS employee's benefit costs need to be fully covered at current levels for 75 years, when the employee would then be 105. Likewise, a retiring 60-year-old USPS employee's pension benefits need to be fully covered for 75 years out -- when the retiree would then be 135 years old.<p>So, if USPS wants to hire, say, a new mail carrier whose benefits are worth (say) $20,000/year, they must immediately pay $1.5M into the fund (it's actually higher than that because there is a discount factor applied to account for interest and rising health care costs). Imagine if your startup or small business were held to the same requirements, and any reasonable person can see this is insanity.<p>Here's a WaPo article covering the problem in more detail:<p><a href="http://www.washingtonpost.com/blogs/federal-eye/wp/2013/02/08/mandate-pushed-postal-service-into-the-red-for-first-quarter/" rel="nofollow">http://www.washingtonpost.com/blogs/federal-eye/wp/2013/02/0...</a>