How To Reinvent The US Postal Service
Technology has evolved postal services globally, so are the answers for fixing the USPS already available?
Yes, for example, the EU postal sector has undergone a significant sustainable transformation overcoming many of the same challenges, including modernization changing consumer demand from delivery of mail to parcels.
Should USPS be a business? Not according to TheWeek and jury is out on what operating model is best. In 1971 the US Post Office became USPS (United States Postal Service) and with the name change a focus on ‘paying its own way’ much like a business. However, restrictions on it including needing to deliver mail to all parts of America have given it a handicap other service providers don’t have.
Businesses like UPS, Amazon FedEx can choose where they provide their service, whereas the USPS doesn’t have this luxury. Survival has been the name of the game, while it’s competitors have focused on investing in transformation and new technologies.
Republicans believe it should operate as a business, while the Democrats are not so sure it should. What is evident is the USPS has been in decline for many years. Surviving on Government handouts is not the way forward, better to use funds to invest in modernization and a service that’s adaptable to change.
So what should we do?
Let’s Save USPS
Most Americans see want the mail service to continue. They view it as an essential service and a vital link to democracy.
Let’s collectively support USPS’s journey onto a sustainable model that provides the services Americans need and want.
The USA has made any change to services difficult. The USPS has been throttled by too many regulations to effect real cost-saving measures. What USPS needs is the flexibility to revolutionize its operations. For example, cutting out Saturday deliveries this one action could have saved USPS through consolidation of hundreds of mail processing centers and 28% workforce reduction however in Congress there was strong opposition to it, so Saturday deliveries continue.
There was this plea from the agency….
[L]egislative change is urgently needed to address matters outside the Postal Service’s control. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority.
Unfortunately, the plea fell on deaf ears!
Has COVID-19, made the threat to the post-service more real? Yes, and the time to listen is now.
USPS Pre-Funding Requirement
Did you know the USPS fund its operations, without tax dollars? Due to the 2006 legislation, pre-funding retiree health benefits has fallen squarely on USPS’s shoulders with help from the Federal Government. What you may not know is this requirement is unusual for a federal agency.
Change requests to the existing 2006 law would forgive USPS debt in attempting to meet the pre-funding requirement and set them up to seek new investment strategies to secure the business.
Another example of strangling the USPS is the current requirement to rely entirely on US Treasury securities, which is ludicrous given the near-zero interest rates. The USPS needs to look for more profitable investments to prop up their revenue and the same flexibility to change its rates or fees.
Instead of having to raise fees in alignment with the CPI let them choose within reason what they need to charge to ensure the service is sustainable. For example, commercial mail delivery fees could go up by more than the consumer price index while not changing the increases for residential mail services.
Other Options For Change
Partnering with commercial delivery providers and reducing the number of delivery days are just a couple of ideas that have been put forward as part of a sustainable operating model for the USPS.
Plus offering other advertising mail services, including online channels like email, and catalogues.
Did you know the USPS delivers circa 142.6 billion mail items annually. Imagine the infrastructure required to meet that load, and technology can improve how it is achieved cost-efficiently.
Did you know the USPS was the motivation for optical character recognition?
The USPS is an institution that supports many small businesses that rely on it to stay in business. With a concerted effort and support, the platform should evolve, so it is a benchmark for other federal agencies that could be self-supporting and sustainable.