De­liv­er­ance for the Postal Ser­vice

A Trump task force points the way to bet­ter fi­nan­cial foot­ing. Congress should act.

The Washington Post - - FREE FOR ALL -

SOME­TIMES GOV­ERN­MENT does a use­ful thing for a bad rea­son. That’s a rough sum­mary of the Dec. 4 re­port just is­sued by the Trump ad­min­is­tra­tion’s Task Force on the United States Postal Sys­tem. The ori­gins of the re­port lie in Pres­i­dent Trump’s Twit­ter at­tacks on Ama­zon last spring, for pur­port­edly us­ing the U.S. Postal Ser­vice as its “de­liv­ery boy,” a “scam” that sup­pos­edly cost the cash-strapped USPS “bil­lions.” (Ama­zon’s founder and chief ex­ec­u­tive, Jef­frey P. Be­zos, owns The Post.) These out­bursts then mu­tated into Mr. Trump’s or­der cre­at­ing the task force to eval­u­ate the Postal Ser­vice’s fi­nances and op­er­a­tions, and make pol­icy rec­om­men­da­tions.

The ul­ti­mate prod­uct is 74 pages whose fully jus­ti­fied premise is that the Postal Ser­vice faces an ir­re­versible de­cline in its most lu­cra­tive line of busi­ness — first-class mail — and will be un­sus­tain­able with­out fun­da­men­tal re­form. The sys­tem’s op­er­at­ing revenue and ex­penses have ba­si­cally matched since 2013, but it is not break­ing even af­ter ac­count­ing for bil­lions of dol­lars in legally man­dated re­tiree health ben­e­fit con­tri­bu­tions that it has skipped since 2011 due to a lack of cash. And it won’t break even over the long term with­out new pric­ing flex­i­bil­ity and lower costs for la­bor, which ac­count for 76 per­cent of the sys­tem’s ex­penses.

On the fraught ques­tion of pack­age charges to Ama­zon and other e-com­merce busi­nesses, the re­port sup­ports nei­ther the pres­i­dent’s ex­trav­a­gant crit­i­cism nor the no­tion that there is no room for im­prove­ment. It notes that pack­ages make up a grow­ing and prof­itable part of the Postal Ser­vice’s busi­ness, with­out which its plight would be even worse. How­ever, there could be op­por­tu­ni­ties to make even more revenue from pack­age de­liv­ery if USPS max­i­mized prof­itabil­ity rather than vol­ume, the re­port notes. The Pack­age Coali­tion, of which Ama­zon is a lead­ing mem­ber, warned that “by raising prices . . . the Postal Task Force’s pack­age de­liv­ery rec­om­men­da­tions would harm con­sumers,” but there might be room for com­pro­mise here, es­pe­cially since the re­port said USPS “should not sin­gle out in­di­vid­ual com­mer­cial cus­tomers for dis­parate treat­ment” and en­dorsed a con­tin­ued gov­ern­ment-backed Postal Ser­vice role in com­mer­cial pack­age de­liv­ery, at least for the short term.

Ac­tu­ally, pack­age pric­ing is a side is­sue com­pared with the Postal Ser­vice’s far more ur­gent prob­lem: the dis­place­ment of the first-class let­ter busi­ness by elec­tronic com­mu­ni­ca­tions. And on that point, the re­port had a num­ber of good sug­ges­tions, the com­mon fea­ture of which was that USPS needs to be al­lowed to charge mail­ers of all kinds rates based much more on eco­nomic re­al­ity, rather than sub­ject to price caps, as at present. Cre­atively, the re­port pro­posed charg­ing some ship­pers to de­liver to mail­boxes, to which the Postal Ser­vice en­joys ex­clu­sive le­gal ac­cess, rather than re­quir­ing them to use USPS per­son­nel. And, wisely, it sug­gested re­struc­tur­ing, but not elim­i­nat­ing, the re­tiree health pre-fund­ing obli­ga­tion.

In short, the Trump task force’s di­ag­noses and pre­scrip­tions re­sem­ble those in many pre­vi­ous such doc­u­ments. Well aware of the sys­tem’s is­sues, Congress could, and should, have acted on ear­lier re­form pro­pos­als long ago. When will the de­lay fi­nally end?

AN­DREW HARRER/BLOOMBERG NEWS

A let­ter car­rier pre­pares a ve­hi­cle for de­liv­er­ies in Wash­ing­ton last year.

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