Tag: first class mail

Postal Reform in the Lame Duck?

According to the Hill, policymakers are “scrambling” to do something about the U.S. Postal Service in the current lame-duck session of Congress. The USPS’s recently announced $15.9 billion loss for 2012 apparently inspired policymakers to act.

It’s hardly a surprise that Congress has waited as long as it can to do something about the USPS. Interest in postal issues for most members probably doesn’t go beyond naming post offices and franking. And regardless of whether Congress passes “reform” legislation in the lame-duck or next year, it will end up just kicking the can down the road. (Policy analysts who are frustrated with the inability of Congress to tackle entitlement reform would be wise to stay away from postal policy issue for mental health purposes.)

To get an idea of how absurd the current negotiations are, take this line from the article:

[S]ome liberal lawmakers and postal unions have pushed back against any attempts to limit six-day delivery, saying it would make bad business sense for the Postal Service to give up any competitive advantage as it moves forward.

Competitive advantage? By law, private carriers can’t compete with the USPS on the delivery of first class mail. To the degree that first class mail “competes” with the private sector, it’s with the internet. Going from six-day to five-day delivery won’t change the fact that the demand for the USPS’s flagship monopoly product is in permanent decline as more and more people decide to click “send” instead. What makes “bad business sense” for the USPS is to leave politicians in charge of it.

[See this essay for more on privatizing the U.S. Postal Service.]

Privatize the Post Office

Another day, another story on financial troubles at the federal government’s mail monopolist.  We don’t expect the government to make our blue jeans, transport fruits and veggies from the farm to the market, build computers and IPods, or manage the manufacturing of automobiles, so why must it continue to deliver first-class mail?  The quality of the USPS’s “services” has been a punchline in my family since I learned to walk.  But with technology rendering it’s clunky business model increasingly moot, Government Mail’s bottom line is looking uglier and uglier. It would cost me 44 cents to mail a letter to California, and it would cost me the same amount to mail that letter to the next town over.  What sense does that make?

As today’s editorial in the Washington Post leads off:

THE POST office may be the next too-big thing. If it continues on its present course, the U.S. Postal Service stands to post $6 billion to $12 billion in losses by the end of the fiscal year. By the end of the second quarter of fiscal 2009, it had racked up an operating loss of more than $2 billion, almost equal to its total losses last year. So far, the Postal Service has depended on loans from the Federal Financing Bank, a federal borrowing agency, to help make up the difference, but it is fast approaching its $15 billion credit limit. Something has to give.

Kudos to the Washington Post for proceeding to acknowledge that the rest of the western world has been trending toward privatization of it’s government mail monopolies for years.  My colleague Chris Edwards recently touched on the issue of privatizing the USPS as part of a larger piece on privatizing a plethora of federal operations:

The mammoth 685,000-person U.S. Postal Service is facing declining mail volume and rising costs. The way ahead is to privatize the USPS and repeal the company’s legal monopoly over first-class mail. Reforms in other countries show that there is no good reason for the current mail monopoly. Since 1998, New Zealand’s postal market has been open to private competition, with the result that postage rates have fallen and labor productivity at New Zealand Post has risen. Germany’s Deutsche Post was partly privatized in 2000, and the company has improved productivity and expanded into new businesses. Postal services have also been privatized or opened to competition in Belgium, Britain, Denmark, Finland, the Netherlands, and Sweden. Japan is moving ahead with postal service privatization, and the European Union is planning to open postal services to competition in all its 27 member nations.