Tuesday, January 25, 2011

How much does it cost to deliver?

Andrew Schneider is an MBA student at George Washington University, and he's tried to break down how much each portion of our processes costs to mail a 44 cent stamp.

Here's his analysis, as printed in the Washington Post.

Not all of the categories are clear and some appear to be redundant, but here's what he showed:

* Sorting labor, 10 cents
* Delivery labor, 7 cents
* Facility/vehicle maintenance, 2 cents
* Fuel/transportation, 1 cent
* Buildings, equipment, vehicles, 2 cents
* Retiree pension/health, 2 cents
* Misc. expense, 8 cents
* Overhead, 16 cents
Total: 48 cents.
That means we lose 4 cents on every letter.

Care to comment?


Anonymous said...

Math figures can be made to tell any story the way the story teller decides.

My opinion: I'm no math wizard but this has so many holes it isn't worth printing. What was the Washington Post thinking?

Anonymous said...

Though I am not sure about the posted numbers, a new formula needs to be created to give each area their just share of all postal sales. A bulk mail center may show billions in sales but tehy don't deliver any mail directly to our customers. I work in a small rural post office and my sales may be small, but we deliver a lot of mail. So by HQ standards we are not "profitable" but if we were to be given a share of the sales generated on the mail I receive to deliver...that status might change.