Friday, July 31, 2009

Halfway Business Is Not Business At All Or Saving Money Might Actually Cost You Money

My aunt works in a small town Post Office. I live and frequent another small town Post Office. To deal with the recession and budget shortfalls, both of these offices have closed their customer service centers on Saturday. My aunt admits that Saturday is (was) by far their busiest day. The post office I frequent always seemed to be busiest on Saturday. Both were only opened for three to four hours on Saturday anyway. They usually had to stay open twenty minutes later than their closing time because of the line that "last minute" customers formed.

But that is not the whole story. The Offices will still have to be open on Saturday for people to put up and deliver mail. They way my aunt explained it to me, each office is only saving at most 5-6 man hours, probably less.

Virginia is also closing rest areas along its interstates. Some states have privatized-franchised rest areas. I know that those vending machines could make money. I know some people would spend a small fee to park and use a toilet. My travels have taught me that stopping at convenience stores and fast food places when you don't need gas is costly and bad for your health.

I have said this a million times, but economists have failed to teach anything. Maybe I am wrong and these closings will save money, and I appreciate that the people who made these decisions know their situations better than me. But you can't throw fixed and variable costs and revenue out the window when you're making decisions just because you're in the quasi-public realm.

4 comments:

Sam said...

The post office is supposed to run like a corporation. I can't think of a business that would shorten their hours on their busiest day of the week. Tuesday seems like a better time to shorten, but would probably be less popular with employees.

Wannabe Bastiat said...

My aunt suggested closing Wednesday, but "having Saturdays off will be nice." The other thing is that delivery doesn't have to be seven days a week. It would save money and carbon emissions if no mail was delivered on Wednesdsays. It would also save the Post Office money and create revenue if more people rented Post Office boxes.

A smart C.E.O. could make the Post Office profitable and true competition for FedEx and UPS. They just have so many assets.

jeffreynutsachs said...

Wow, you're both showing off that you've never had a proper job before. If the mail doesn't run Monday through Friday a significant number of businesses would be screwed. It's hard to believe this but we have to wait for the HHS to send us a check before we can start some of our grants. Given the amount of auditing and "fraud prevention" currently being administered by the GAO and HHS we can't just put grant paid employees on a pool/overhead account, we have to have funds in hand before they can start working. Imagine what it's like for Mom and Pop shops and insurance companies. Even with faxing and the internet hard copies still have to be in hand for claims processing. Believe me, I've found this out first hand.

Closing the Post Office on Saturday might an inconvenience to you but closing it during the week would throw a major wrench into our already dismal work flow.

Wannabe Bastiat said...

I get where not delivering during the week could be a disaster especially for business.

But I don't understand how closing a few rural Post Offices on Saturday is going to save money, because they are still going to deliver and put up mail. Are they going to save electricity? I might be missing something, but I just don't get it.

Speaking of Post Office--that was a great book.