Reform Can Help USPS Operate More Efficiently in a Competitive Marketplace

Reform Can Help USPS Operate More Efficiently in a Competitive Marketplace
(AP Photo/Josh Replogle)

The United States Postal Service (USPS) is one of the oldest U.S. government agencies and has provided an essential service for almost two hundred and fifty years. But as the American economy and the needs of consumers have evolved and grown to incorporate rapidly advancing technology, our postal service has lagged behind the times.

The USPS has experienced significant changes in recent weeks, from its revenue taking a major hit due to the Coronavirus outbreak to the appointment of a new Postmaster General who is a seasoned hand with a background in logistics and operations.  But more fundamental legislative reforms are necessary to modernize the USPS and ensure that it is meeting the needs of American consumers in an ever-evolving market.

The volume of paper mail has significantly decreased over the past few decades and been replaced by online delivery and e-commerce. The USPS also competes in the shipping market with other private companies like FedEx, Amazon, and UPS to quickly provide online retailers with the most efficient delivery services.

But there is a major difference between how the USPS and private shipping companies operate. The USPS, one of the largest civilian employers in the United States with almost half a million employees, is managed by the Board of Governors, which controls daily operation and postal rates, and the Postal Regulatory Commission that oversees postal rates and has the authority to reject or implement USPS proposals.

The government bureaucracy that controls the postal service is slow to respond to changing market demands and hampers innovation.  The current structure has drawn high-level criticism from Congress, Treasury Secretary Mnuchin, and President Trump, especially as USPS requests a bailout due to the pandemic. The media attention that postal reform has recently received may be new, but Congress has been actively working on this issue for decades.

Legislative action can help USPS stay afloat and operate more efficiently in a competitive marketplace if the right policies are put in place. The USPS has garnered criticism from all sides, and the discussion of potential change, such as new pricing policies, has turned this issue into a political football.

Congress should make the Board of Governors more akin to a corporate board of directors, responsive to changes in consumer behavior rather than a political agenda tied to outmoded concepts from past centuries.  A de-politicized Board of Governors would increase management’s flexibility to make long term plans and more efficiently set prices according to the current marketplace.

In addition to changes in the way in which the management of the USPS is structured, re-thinking the legislatively set service requirements and corresponding legal privileges that govern its service offerings would benefit consumers as well.  Congress should allow USPS to decide the scope of its business activities in response to consumer demand rather than a politically motivated agenda. I don’t believe that the government should be competing in the private sector, but this is clearly an issue we need to address.

The USPS has struggled to keep pace with the relatively rapid changes to the American economy over the last few decades as consumers have transitioned to electronic communications in place of the USPS’ core postal delivery offering, while at the same time exponentially increasing the number of packages delivered due to a transition away from brick-and-mortar retail and towards online shopping.

Despite all of those changes, postal delivery remains an essential service, but maintaining that service and the viability of the USPS will require real reforms that only Congress can implement.  It may be necessary for Congress to forgive some of the massive debts that the USPS has incurred to keep the USPS alive, but that should not come without key reforms that will avoid future cash crunches.  Congress needs to act now to implement long-overdue postal reforms to help the agency adapt to changing marketplaces and ensure its operation in the long-term.

Todd Johnson is a North Carolina State Senator who also serves as a member of the North Carolina Board of Community Colleges.

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