USPS Needs Institutional Reform For Long Term Viability

(AP Photo/Teresa Crawford)

The United States Postal Service (USPS) is a staple in American culture, but the job of a postal carrier has rapidly evolved over the past decade. Letter communications are declining and the rise of e-commerce shipments has taken its place. The stay-at-home orders during the Coronavirus outbreak resulted in a significant increase in shipping demands putting a spotlight on how the USPS operates.

The USPS requested almost $75 billion in relief funds to stay viable, citing a 30 percent decrease in volume due in part to COVID-19. This is at a time when an increase in online shopping, which includes essential grocery and household items, impacted U.S. cargo carriers that transported and delivered the increase in freight.

Treasury Secretary Steven Mnuchin indicated that he is working with USPS on a relief package to aide one of America’s oldest government agencies. Secretary Mnuchin also stated that the loan agreement will include certain criteria for postal reform, which is long overdue. As technology and our economy have evolved and changed the way we operate daily, agencies that are ingrained in this process need to adapt too.

That’s why the USPS needs institutional reform. USPS faces stiff competition from private companies that can quickly and efficiently transport cargo worldwide, while also relying on these same companies as a service supplier. If USPS had more flexibility to compete in areas like e-commerce shipments and pricing, it would allow the agency to better succeed in the competitive marketplace. If and when reform allows the USPS to manage its business more like those in the private sector, it should also be held accountable to the same regulations as other delivery and shipping companies.

If the Board of Governors, who are appointed by the President under advisement and consent from the Senate, were de-politicized they could better focus on providing USPS customers with cost-effective services without factoring in political or special interest objectives. An essential service such as national postal delivery should not be hindered by political fighting or goading.

The need for reform is more urgent now because, in recent weeks, we’ve seen how quickly the marketplace can change. The Coronavirus outbreak amplified the need to move essential goods, including mass shipments of tests, personal protective equipment, and medical supplies quickly. USPS would have had more success if it were allowed to operate as a private company. Legislative bodies are not best suited to quickly change with the marketplace and determine the right service for the right price to meet the changing customer needs as that USPS is experiencing right now.

But while postal reform needs to include better practices from the Board of Governors to increase competition, there still needs to be regulatory oversight to prevent marketplace dominance. The Postal Regulatory Commission, an independent regulatory agency that helps set postal rates, must meet basic requirements such as setting appropriate cost coverage and maintaining transparency.

The United States Postal Service is an important government service that has helped connect businesses, people, and communities for almost two hundred and fifty years. As Congress and Treasury Secretary Mnuchin look to provide USPS with relief that includes reform, now is the time to enact meaningful policies that will help ensure the institution’s long term viability.

Ted Alexander is a Republican member of the North Carolina State Senate.