During the day I check my work email about once every 10 minutes. I comb through my personal email about once an hour. I look at Twitter more often than I care to admit, and I just sent a text message on my phone. But when I get home from work I walk right past my mail box, blissfully ignorant of all the junk that sits inside.Like an increasing number of Americans, I have very little use for the US Postal Service (USPS). Ever since I opted out of pre-screened credit offers, my mail has been reduced to letters from a cable provider who mistakenly thinks I don’t watch enough TV. I like the idea of sending letters, but as my mother will tell you, I rarely do.
This is the challenge facing the US Postal Service. The volume of mail has plummeted in the last few years, falling from a high of 213 billion pieces in 2006 to 168 billion last year. And things are only expected to get worse. Part of this can be blamed on the recession, but most of it is a result of changes in the market, changes in the way Americans communicate, share photos, send invites and pay bills.
If the postal service were a normal business it would be bankrupt. It is losing somewhere between $30m and $40m a day. But it is not a normal business. Despite not receiving federal funds, the service must answer to Congress, which has burdened it with an obsolete mission it must serve every American household, for the same price while limiting its scope to transform.
Walk into a post office in Europe or Asia and you’re likely to see a range of services on offer, from banking to insurance to retailing. But in America, Congress has stopped the postal service from entering many of these fields, claiming the agency has an unfair advantage over the private sector due to its monopoly on first-class mail. Private businesses have also objected, running to legislators when the service encroaches on their turf. The first paragraph of this New York Times article offers a telling example.
Today the Senate took up legislation aimed at saving the postal service. The measure will do no such thing. It cuts in half the number of mail processing centres the service wanted to close, and delays the closing of underused post offices. It also postpones a decision on whether to end Saturday delivery, which ought to be the first reform the service enacts. The service will recoup some $11 billion for overpayments into a generous pension fund, but that may only prolong its decline. A number of amendments have been proposed, many watering down an already timid bill.
Perhaps more discouraging is the debate accompanying the proposal. Claire McCaskill, a senator from Missouri, calls plans to close rural postal offices “callous, unnecessary and irresponsible“. Jeff Merkley, a senator from Oregon, calls them “devastating and economically idiotic”. Yet the offices in remote areas are the ones costing the USPS the most money. Noticeably absent from the debate is any discussion of a viable long-term business plan.
What the Senate bill (and a more far-reaching bill in the House) really does is reinforce the fact that the postal service is not a genuine business. For no business has a 535-person board of directors that is more responsive to political pressure than market forces. Others, including my colleague, have suggested more useful reform proposals than the ones currently on offer. Those that foresee continued mail delivery acknowledge the inevitability of government subsidies. But it is difficult to see how any of these come to pass Congress. This, after all, is the body that told the postal service to act like a business while taking away its means to do so. And it thought that was a good idea.
Even if the service were to unburden itself of government interference, it would still be weighed down by pension obligations, calling its competitiveness into question. One of its main advantages comes in having an enormous infrastructure, with more offices than the number of McDonalds, Starbucks and Walmart outlets combined. There is surely some good use for these buildings. But if the government or private minds can’t think of one, why not sell them and use the money to bring high-speed broadband to every corner of America? That would ensure the postal service dies a noble death.
(Photo credit: AFP)
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