“THE SITUATION IS GETTING WORSE”
TPC,I work at the Post Office throwing parcels and have never seen mail volume so low. The situation is getting worse, not better.Parcel volumes are down at least 30% and even the bulk mail is declining. I used to struggle to complete my job in 8 hours; now I easily finish my job and then go on to help my colleagues. Employees who leave are not replaced. No one is assigned to jobs in the event of illness or vacation. People just pick up the slack. Some large distribution centers are being closed and people transferred as far away as 100 miles.
There will be serious problems for all of the delivery companies if the low volumes persist and gas prices continue to escalate.
There seems to be no recovery in sight; mail volumes and work hours are plummeting. Bulk mailers seem to have figured out a way to target their desired audience. For us at the Post Office, that means that the circulars that used to go each address now only go to those with the greatest potential to buy. Even a few months ago, one of our weekly bulk circulars would arrive on three, very-highly stacked pallets. Now they arrive on two, wimpy pallets. Circulars that continue to be delivered to every house are now very thin, with not many advertising inserts. Upscale department stores have significantly cut back on their advertising.We have totally eliminated our Sunday work force. As a result, for awhile, there was a huge backlog on Monday from Sunday’s mail that sat in the distribution center. Each truck came in 100% full, and some first class parcels were left behind for the last truck. Now, even after eliminating one of the trucks, the mail easily fits in the trucks; it is rare to have a truck loaded 100%.Previously unaffected areas of our work have also been affected. Several months ago, the window service and the box section were relatively unaffected by the dwindling mail volumes. Individual customers still came into the Post Office to mail their parcels, and businesses and individuals still rented P.O. boxes. Now, the long lines at the customer windows have shriveled, and there are many, many closed P.O. boxes, especially long-standing business boxes.
The postal management is taking drastic steps to reduce costs and increase revenue. Unlike UPS or Fed Ex, they don’t seem to be forecasting any upturn. Perhaps they are parroting the feel-good “green sprouts” words at the Postmaster General level, but our state level management is not mouthing such clichés. Our district policy seems to be “prepare for the worst” and “wait-and-see”. At least, that’s what I am hearing through the unofficial grapevine. Upper management appears very nervous.
USPS volumes are in secular decline to some degree, and that reflects the trend of less paper transactions in our everyday lives. In addition, many marketing dollars have moved from print to electronic/online. I wouldn’t expect the USPS to see much of a recovery, ever.
Anecdotal, but seems to me like magazines and newspapers are getting thin… noticeably thin. Perhaps it’s because I just got back to the US, but the Sunday LA Times looked like a weekday paper in thickness, I saw it and thought that maybe there had been some kind of mistake.
Also, GQ (yes, i know, the great barometer of our economic well being) came in at 125 pages for the July issue – this is less than half of the average from last year.
Again, super anecdotal, but seems like lots of tightening up going on everywhere.
Would be nice to know which part of the country this person worked because some states have taken a bigger hit than others.
Good comments. One data point clearly isn’t necessarily a good representation of the entire country. Divided, this reader is from Washington where the recession has been bad, but not substantially worse than anywhere else.
MailNudity & Anonymephistopheles,
Mail might be a declining industry, but more important is the fact that this person is seeing no signs of volume recovery. You both overlook that fact in your analysis.
The Coke guy who delivers my bottled water also works nights loading planes for UPS. At last Wednesday’s (June 17th) delivery he told me that their volume had dropped by at least 30%. The regional airport where he works at is in a Midwestern town of 150,000.
I talked extensively this spring during matches to the mother of one of my son’s soccer teammates who works in a regional administrative position for the USPS. I forgot the details but the drop in volume and revenue was staggering. She was certain that attrition wouldn’t cut staff adequately. She claimed at that time they were considering laying off anyone with 6 or less years of service – nationwide.
great stuff TPC. thanks for passing this along.
Anyone else taking advantage of the dips in the momo’s for potential quarter end mark ups? I covered my RIMM short and bought some AAPL…cant get a good feeling whether they will mark them up or all the hedgies will look to lock in profits.
Eric, I am not repositioning my portfolio despite what looks like upside risks during the rest of the week.
I don’t want to be short into the rest of this week. wait until Friday and then look to get short into the rest of the summer. Oil will roll over and when it does it will take the whole market with it.
This is the only week I’m afraid of… GDP and the other numbers may be enough to spur the markets up. Other than that, I think the markets will go down based on the low volume. My theory is that volume is low because hedge funds have gotten out of the market to lock in their gains for this quarter. They are risk adverse after taking a beating so they will stay out until after they can print their statements to their customers showing substantial improvements after the 1st quarter. They can afford another quarter of withdrawals.
The thing that supports this hypothesis is the fact that the daily ATR was below 20 (until today), which was the high water mark for volatility up until July 2007 – when the uptick rule was revoked. I think that means hedge funds are largely out of this market right now, and explains the complete lack of volume.
After July 1st, I think markets will rally again.
Also in an anecdotal note: one of my friends works for one of the largest banks in Canada. He works in the unit that handles wire transfers and apparently transaction volume has plummeted by 70%+ since last October. Volume has picked up yet, but it has definitely stabilized since the lows.
Dude,
this “postal worker sounds awfully like a college grad. Doncha think. This isn’t the writing of a postal worker.
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