Postal rates are only part of the system’s problem
Your Dec. 26 editorial on postal rates was mostly correct, but it was incomplete. It is a complex subject.
First, international postal rates are not the problem that is driving postal finances. They are, in fact, a relatively small part of the problem. Postal operating revenue in 2018 was almost $71 billion, an increase of $1 billion over the previous year.
The fundamental problem is a congressional tax on the postal service that requires the organization to pre-fund the health care costs of future employees. No other organization in the country has this requirement and it costs the USPS about $5 billion annually and results in the net loss reported each year. However, any payments the postal service makes to its account are also credited as revenue for the federal government — which in turn reduces the federal deficit somewhat. Which is why the Republican Congress did it. It is smoke-and-mirrors financing.
The second problem is that the postal service has been dependent upon revenues from letter mail, which have been declining for years. The check is no longer in the mail. So the postal service ramped up its efforts to attract package business, and that part of the operation has been very successful.
A major contributor to this success was the development of negotiated service agreements with organizations such as Federal Express, United Parcel Service and, yes, Amazon.
These are confidential, not secret. Each agree- ment follows very strict rules and is reviewed in detail by the independent Postal Rate Commission. As a result, the postal service partners with these organizations in a way that benefits customers, consumers, the postal service and its partners. It is a win-win solution. The process has been reviewed by yet another independent organization, the USPS Office of the Inspector General. The results of this audit and recommendations for improvement are publicly available.
The third problem faced by the postal service is that it is chartered in the U.S. Constitution as a public service. The definition of public service has changed over time but still includes daily delivery (including weekend and holidays for packages) to nearly every address in America, and the maintenance of post offices in rural America that do not cover their costs. Congress has resisted efforts to cut these costs.
The adjustments in the international postal rates, especially for packages from what are no longer developing countries, is a long-standing wish of the postal service. It was necessary and it will help the postal service. But it doesn’t have much to do with disagreements between Jeff Bezos and President Trump. Amazon has already developed its own delivery force and is expanding to compete directly with FedEx, UPS and even the postal service.
Kent Smith, Waldorf
The writer is a retired executive with the U.S. Postal Service.