The price of US postage stamps has been going up, but at 44 cents, they remain an amazingly good value.
Using a single stamp on a regular envelope, you can send your rent check to the landlord down the block, or to Florida.
The other day, stuck with some leftover Simpson’s stamps, I got to thinking, “What is the break-even point? At what distance is it cheaper to mail the check versus delivering it yourself in the car?”
It’s a fairly simple calculation. Take the price of gasoline and divide it by your car’s rate of fuel consumption to obtain your price per mile. For example, if gas is $4.30 per gallon, and your car gets 28 miles per gallon, your price per mile is $4.30/28 or 15¢ per mile.
Next, divide the price of a first class stamp by your price per mile (in this example 44¢/15¢) or 2.8 miles.
2.8 miles is the total distance you can drive for the price of a stamp, but of course, you will have to make a round trip, so the maximum distance driven to deliver a rent check should be half that distance, or 1.4 miles.
This would make an excellent question on a math test 🙂 Total cost of ownership of car, your time, etc, etc.
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You also should factor in the time that you spend delivering it yourself as well as the wear and tear on your vehicle. If I make $20/hour, at about a minute and a half the cost of my time has already exceeded the cost of a stamp.
This assumes that your (leisure-)time is free. Or driving in a car produces neutral utility. And having the letter delivered in the next fifteen minutes has the same utility than having it two days later. Also, are you really sending “rent checks” to you landlords in “letters”? Don’t you have “standing orders” and “banks”?
So self-delivery can be cheaper than a stamp… -if- you are unemployed and therefore can waste 25 minutes -and- you have access to free fuel and maintenance for your vehicle?
This leaves out carbon footprint also. Note that a lot of Postal branches have delivery vehicles powered by electric, CNG, propane, Segway, or bicycle. (Not by any sense would this be a majority of the fleet… but still a higher percentage of alternative fuel vehicles than the general population)
NOTE: Bug in the captcha. If you get it wrong and try to correct, it claims "Slow down you are posting too fast" (yet this is my first post of the day, so the error text is not quite right)
@scott – it’s a fun thought experiment. just like when is it worth it to: drive, take train, taxi, plane, etc, etc. there are time and money variables as well as other things to consider.
when kids do math problems, no one ever buys 60 cantaloupes but they’re in there as part of the math problem to solve.
I remember when I calculated the true cost of commuting (I was organizing a van pool) about 15 years ago, I came up with about $0.50/mile–and that wasn’t with $4/gal gasoline. The Van Pool people told me that there internal calculations came up with the same fifty-cents-a-mile figure. The government lets you deduct the same amount for miles driven for business. The truth of the matter is that you can only drive about 9 blocks for the price of a stamp, and that doesn’t take into account the opportunity cost in lost time.
As you hinted at the end of the post, wear and tear on the car is a much bigger cost than most people would guess.
Say you have a $40,000 car. You drive it for 150,000 miles before it needs replacing. In that time you spend $10,000 on maintenance and repairs — that’s $0.33 per mile. More than the fuel cost you calculated.
By driving, I’m sure the letter won’t get lost – there’s great value in that. One lost letter can mean a large relative cost in the form of late penalties.
The taxpayer funded USPS measures the percentage of lost and mis-delivered mail (EXFC System), but refuses to publicly release the measurement methodologies or results. Current third-party studies put the percentage of lost and mis-delivered first class regular mail at roughly 5%, and it is increasing.
Also, the USPS is costing us huge amounts in taxpayer funding because it is running in the red – to the tune of $23 billion a year currently and an estimated third of a trillion taxpayer dollars over ten years (yes that’s trillion with a “t”).
Then there are billions the USPS is costing the taxpayers in bloated Union pension plans – which are bankrupting the country.
The TRUE cost of that one USPS stamp is truly enormous.
Shut down the USPS – pay electronically. That’s the responsible thing to do from both an environmental and a fiscal perspective.
@drone – that does not seem correct. the USPS is funded through the sales of products and services and does not receive taxpayer funds directly. it is not a corporation. however, it is still an agency of the federal government. it was doing great up until 2007.
the USPS, like many banks, is/was borrowing $9 billion + from the US treasury. the last we checked the USPS had a $20 billion loss over the last couple years, if we had to choose who gets a bail out, we think we’d choose the post office over bankers. our carrier isn’t going to get 10 million dollar bonus for ripping off people any time soon 🙂
What 10000 in repairs? U must not be N engineer one time my tranny dropped and I used a coathanger to hold it, lAsted from new York to l.a. Where I went to a junkyard. and pulled a few bolts for 10 cents buy it it consume consume consumerism consumers….. Where r the makers and producers so microscopic u can’t see them
You also should factor in the time that you spend delivering it yourself as well as the wear and tear on your vehicle. If I make $20/hour, at about a minute and a half the cost of my time has already exceeded the cost of a stamp.
This assumes that your (leisure-)time is free. Or driving in a car produces neutral utility. And having the letter delivered in the next fifteen minutes has the same utility than having it two days later. Also, are you really sending “rent checks” to you landlords in “letters”? Don’t you have “standing orders” and “banks”?
Is this a delayed April 1 post?
So self-delivery can be cheaper than a stamp… -if- you are unemployed and therefore can waste 25 minutes -and- you have access to free fuel and maintenance for your vehicle?
This leaves out carbon footprint also. Note that a lot of Postal branches have delivery vehicles powered by electric, CNG, propane, Segway, or bicycle. (Not by any sense would this be a majority of the fleet… but still a higher percentage of alternative fuel vehicles than the general population)
NOTE: Bug in the captcha. If you get it wrong and try to correct, it claims "Slow down you are posting too fast" (yet this is my first post of the day, so the error text is not quite right)
@scott – it’s a fun thought experiment. just like when is it worth it to: drive, take train, taxi, plane, etc, etc. there are time and money variables as well as other things to consider.
when kids do math problems, no one ever buys 60 cantaloupes but they’re in there as part of the math problem to solve.
have fun with it 🙂
All this will be mute eventually….my teleporter is almost finished…the market for teleporter receivers will be hugh!…regards…
I remember when I calculated the true cost of commuting (I was organizing a van pool) about 15 years ago, I came up with about $0.50/mile–and that wasn’t with $4/gal gasoline. The Van Pool people told me that there internal calculations came up with the same fifty-cents-a-mile figure. The government lets you deduct the same amount for miles driven for business. The truth of the matter is that you can only drive about 9 blocks for the price of a stamp, and that doesn’t take into account the opportunity cost in lost time.
As you hinted at the end of the post, wear and tear on the car is a much bigger cost than most people would guess.
Say you have a $40,000 car. You drive it for 150,000 miles before it needs replacing. In that time you spend $10,000 on maintenance and repairs — that’s $0.33 per mile. More than the fuel cost you calculated.
By driving, I’m sure the letter won’t get lost – there’s great value in that. One lost letter can mean a large relative cost in the form of late penalties.
The taxpayer funded USPS measures the percentage of lost and mis-delivered mail (EXFC System), but refuses to publicly release the measurement methodologies or results. Current third-party studies put the percentage of lost and mis-delivered first class regular mail at roughly 5%, and it is increasing.
Also, the USPS is costing us huge amounts in taxpayer funding because it is running in the red – to the tune of $23 billion a year currently and an estimated third of a trillion taxpayer dollars over ten years (yes that’s trillion with a “t”).
Then there are billions the USPS is costing the taxpayers in bloated Union pension plans – which are bankrupting the country.
The TRUE cost of that one USPS stamp is truly enormous.
Shut down the USPS – pay electronically. That’s the responsible thing to do from both an environmental and a fiscal perspective.
@drone – that does not seem correct. the USPS is funded through the sales of products and services and does not receive taxpayer funds directly. it is not a corporation. however, it is still an agency of the federal government. it was doing great up until 2007.
the USPS, like many banks, is/was borrowing $9 billion + from the US treasury. the last we checked the USPS had a $20 billion loss over the last couple years, if we had to choose who gets a bail out, we think we’d choose the post office over bankers. our carrier isn’t going to get 10 million dollar bonus for ripping off people any time soon 🙂
What 10000 in repairs? U must not be N engineer one time my tranny dropped and I used a coathanger to hold it, lAsted from new York to l.a. Where I went to a junkyard. and pulled a few bolts for 10 cents buy it it consume consume consumerism consumers….. Where r the makers and producers so microscopic u can’t see them