Postal Service Continues to Implode

Today, the U.S. Postal Service warned that it could lose $238 billion over the next ten years if it doesn’t receive greater managerial flexibility from Congress.

The European Union and other countries around the world have long been moving toward competition and privatization for mail delivery services. Yet the United States remains way behind the global trend.  The rise of the internet and other advances in telecommunications have fostered an irreversible decline in the USPS’s mail volume. At the same time, it’s being weighed down by a predominantly unionized workforce whose compensation and benefits constitute 80 percent of USPS costs.

As President Obama himself said last August, “UPS and FedEx are doing just fine…It’s the Post Office that’s always having problems.”

In the short term, Congress should remove the USPS’s monopoly on the mail, and in the long term lay the foundation for its breakup and privatization. That is unlikely to happen, of course, because the politics of any issue will trump a sound business decision any day of the week.

One of the USPS’s requests is to eliminate Saturday service to cut back on costs. In a world where the government’s mail monopoly no longer existed, private mail delivery firms could compete to deliver mail on Saturday, or even Sunday. But no such competition exists because the government will not allow it. The federal government has wasted untold taxpayer dollars on anti-trust witch hunts against private companies like Microsoft, but apparently what’s good for the goose isn’t good for the gander.