The battle goes on, for the life and soul of the United States Postal Service. Life and soul? Yeah, that’s what I think. We are at a cross roads to decide whether we will keep the USPS as we know it, or will cut it down to a botique service used for direct mailers and holiday cards.
I hate to sound so harsh, but I really think that we are at a point of no return. In all of our budget discussions, and the search for expenses that could be reduced, the long knives have come out against the USPS. I would not describe the USPS as the most efficient agency of the government, if there are any of those kinds of animals anyway, but they are important to us as a people and we shouldn’t be in such a hurry to solve the issue…right now.
Last Friday George Will waded into the fray will his piece on privatizing the USPS. A few of his thoughts from the right side of the argument:
“Today, the U.S. Postal Service, whose financial condition resembles that of the federal government, of which the USPS is another ailing appendage, is urging cancellation of Saturday deliveries, perhaps en route to three-days-a-week delivery. The USPS lost $5.1 billion in the latest fiscal year — after serious cost-cutting. Total 2012 losses may exceed $14 billion, a figure larger than the budgets of 35 states.
“The fact that delivering the mail is one of the very few things the federal government does that the Constitution specifically authorizes (Article I, Section 8: “The Congress shall have power to . . . establish post offices and post roads”) does not mean it must do it. Surely the government could cede this function to the private sector, which probably could have a satisfactory substitute system functioning quicker than you can say “FedEx,” “UPS” and “Wal-Mart.”
“The first two are good at delivering things; the third, supplemented by other ubiquitous retailers, could house post offices. All three are for-profit enterprises, so they have an incentive to practice bourgeois civility — to be helpful, even polite. These attributes are not always found at post offices.”
On the philosophical lefter side of the argument on the USPS, David Lazarus, my favorite gadfly columnist from the Los Angeles Times has also weighed in on the USPS situation. I’m going to quote him liberally here so we have a little fairness in the argument:
“Richard Maher can’t remember the last time he wrote a personal letter to anyone — and he works for the U.S. Postal Service. That’s how bad things have gotten for the government agency that, in the age of email, Facebook and Twitter, not to mention FedEx and United Parcel Service, announced last week that it lost $5.1 billion in the last year. And the losses would have been more than double that amount — a record $10.6 billion — if Congress hadn’t allowed the postal service to engage in a little creative bookkeeping and shift an outstanding $5.5-billion payment for retiree healthcare into the current fiscal year.”
Lazarus goes on to say…“As a newspaperman, I know a little something about antiquated business models. Simply put, the postal service can no longer raise the money it needs to do the job it’s required to do. Period. It just isn’t economically feasible.”
“A couple of years ago, after the postal service reported losing a mere $3.8 billion, I asked whether it was time to think about privatizing mail delivery. The problem with that idea quickly became apparent when both FedEx and UPS told me they weren’t interested in the job.
“While both companies might be interested in cherry-picking profitable urban routes, neither wanted the obligation of schlepping mail up and down backwater rural roads. We believe that the government plays a role in terms of ensuring that every mailbox is reached every day,” a UPS spokesman said. “That is not a responsibility that UPS would want.”
“Higher rates are obviously in the cards. A first-class stamp will cost 45 cents as of Jan. 22. Don’t be surprised if that charge quickly grows to 50 cents, or more. But higher fees alone won’t do the trick. That’s why the postal service has also proposed dropping Saturday delivery, closing processing centers nationwide and having the leeway to lay off tens of thousands of workers.”
“But I’d go a step further. Perhaps it’s time to do away with the postal service’s constitutional requirement for universal service. Perhaps it’s time to stop delivering to the sticks. I know, I know: heresy. But think about it. The real problem here is costly rural delivery. So instead of having the mail man (or woman) visit every home everywhere, how about we set a geographic boundary for home delivery at some point on the outskirts of every urban area?”
“Beyond that point, people’s mail would be delivered to the nearest post office, where you could pick it up at your convenience. Or you could authorize someone else to pick up your mail — the neighbor’s kid, say, riding his bike home from school. For more urgent deliveries, such as medicine or medical supplies, an opportunity would exist for local companies to establish services that would bring mail to people’s homes in a timely fashion. Such services could also address the needs of seniors who may not be able to get to the post office.”
For the last word on the issue let’s turn to the man at the top of the USPS. U.S. Postmaster General Patrick Donahoe said the two separate bills that have advanced in House and Senate committees “delay tough decisions” and “don’t come close” to giving the Postal Service the flexibility it needs to stem steep financial losses.
The Postal Service has offered a number of solutions, however not everyone agrees with them – mainly Congress, the Postal Unions, and major mailers. At a National Press Club luncheon, Mr. Donahoe said that neither of the two bills passed recently by House and Senate committees went far enough to help the post office achieve its goal of cutting $20 billion from its annual costs, which are now about $75 billion, by 2015.
Here’s the part that I love to hear, if I had it on tape I would play it over and over – Mr. Donahoe said “We’re in a deep financial crisis today because we have a business model that’s tied to the past,” he said. “We are expected to operate like a business, but don’t have the flexibility to do so. Our business model is fundamentally inflexible. It prevents the Postal Service from solving its problems.”
I think that opening up the discussion to admit that what we are doing today is not sacrosanct, carved in stone, patriotic, or whatever…it is really that the old business model doesn’t work today. Wow, so many buckets of ink have been spilled to get down to that point. If we accept that as fact, and I posit that we should then we need to come up with some answers for our future – for the USPS, its’ employees, its’ customers, both senders and receivers – and move forward.
I will be back soon to talk about all of the possible solutions from as many sources as I can find, top them off with me own – and then let this rest. Like David Lazarus, I’ve spent too many years in the industry not to care, but it is also obvious that the current model doesn’t work and must be changed.