Patrick Schwerdtfeger is a motivational speaker who can speak about the efficiency of government services (like the post office) at your next business event. Contact us to check availability. The full transcript of the above video is included below.
Full Video Transcript:
Hi, and welcome to another edition of Strategic Business Insights. Today we’re going to talk about government services, and we’re here in the United States. I grew up in Canada, but here in the United States, people, they complain about the government. There is an underlying culture in this country to just detest your own government and think that the government is completely inefficient and they do everything wrong.
I happen to disagree. Stop complaining. I mean, that’s my honest opinion, is the government is not perfect, but if you compare it to any large Fortune 500 organization, those large companies have tons of inefficiencies as well. It’s not that it’s public sector versus private sector, it’s big versus small. That’s the real distinction. Small companies tend to be more efficient because they’re smaller, they’re leaner, and everyone sees what everyone’s doing. But these big companies, they have a lot of process, a lot of bureaucracy. Same thing’s true in the government.
But it’s still remarkable what the government can achieve. I mean, for me, I think about the roads that we drive on, which aren’t perfect, but they’re pretty darn good. The freeways are unbelievable in this country compared to Canada. We have clean water. I can flush my toilet and it just goes away. I don’t even have to worry about it. If something happens, police and fire are available. Tons of services that are available, but here is the one that everyone complains about the most, or they don’t complain about it, but they use this as an example of how inefficient the government is: US Postal Service, the USPS. They always talk about how ineffective the USPS is. So let’s break that one down, because I think that’s a load of hogwash.
Here’s the situation. USPS will deliver a piece of mail anywhere around the country for 46 cents. Forty-six cents, and they’ll deliver it in two or three days! FedEx and UPS would never dream of providing that service. They would never even consider providing that service for that cheap, that inexpensive. What do they do? They only do the more profitable types of business. They would never even dream. Why? Because they’re not as efficient as USPS at being able to provide that service.
Now, those of you, the haters out there perhaps, are going to immediately say, “Yeah, but the USPS is losing money.” Well, let’s take a look at what that actually is. Most recently, the revenue of the US Postal Service is 65 billion, and the costs, expenses, are 81 billion. So they lost money. They lost 16 billion dollars.
Now, what does that actually equate to? In other words, what would they have to raise their prices to to break even? Well, they would have to raise their prices 30%, roughly—roughly—to break even. That would take the price of a piece of mail from 46 cents to 60 cents. UPS and FedEx would never dream of offering that service for 60 cents. They would never dream. They would not be able to make a profit on it.
Now, if USPS wanted to actually make a profit, they would have to charge more than 30% more than the current price in order to actually not just break even but actually have a profit. So let’s say they would have to charge 65 cents or even 70 cents to deliver a piece of mail to the other side of the country. I believe that FedEx and UPS would never dream of doing it. They would never dream of providing that service for 70 cents to just the average consumer. Obviously, they cut deals with their massive volume producers like, for example, UPS has very aggressive deals with Amazon, but they’re not delivering pieces of mail, they’re actually delivering packages, and it still costs money because they’re charging more than 70 cents, I’ll tell you that. There’s no way that FedEx or UPS would dream of delivering mail around the country for 70 cents or 65 cents. There’s no way. And meanwhile, USPS does it at 46 cents. Yes, they lose money, but they will be making money at 60 cents or 65 cents and it’s still a bargain.
So this is just my opinion, but I do not believe—big companies have inefficiencies and government has inefficiencies. The government is not an evil institution. The government is there to serve the people, and I think for most of the time, they do a pretty darn good job. So that’s my opinion.
Thanks for watching this video. My name is Patrick, reminding you, as always, to think bigger about your business, think bigger about your life.
Patrick Schwerdtfeger is a keynote speaker who has spoken at business conferences in North America, South America, Europe, Africa, the Middle East and Asia.