The United States Postal Service (USPS) has reported quarterly losses for over a decade and this past quarter appears to be no different. Today, USPS released its quarter three financials, losing $2.3 billion this past quarter and bringing the year’s total to $5.9 billion thus far. The induction of new leadership surrounding the agency will hopefully bring a renewed commitment to address the agency’s perpetual fiscal issues.
Last week, the U.S. Senate voted to confirm Ann C. Fisher and Ashley E. Poling as Commissioners of the Postal Regulatory Commission (PRC) and also approved John Barger, Roman Martinez IV, and Ron Bloom to the USPS Board of Governors. This move to install new leadership for the U.S. Postal Service’s oversight body, and at the USPS itself, marks a promising moment in the ongoing saga within the nation’s capital to solve the Postal Service’s fiscal chaos and establish a positive trajectory for the agency that will allow it to operate in a sustainable manner for future generations.
During their respective hearings before the Senate Committee on Homeland Security & Governmental Affairs, the new Commissioners and Governors spoke appropriately to the vast challenges that the USPS continues to face and the potential considerations for achieving an efficient mail system. Each cited their interest in honing in on key matters including the need to develop parameters for the USPS’ Universal Service Obligation (USO), a modern pricing regime across its array of services, as well as methods to improve service quality and overall accountability to its customers and to lawmakers.
However, new leadership must first contend with frameworks of the Postal Service’s long past-due business plan, which must include strong assurances that each of its commercial functions are independently viable if the agency ever seeks to call itself an independent self-sustaining business. To reinforce these big ideas, the American Consumer Institute has weighed in on numerous compliance cases with the Postal Regulatory Commission to highlight actionable steps for USPS improvement.
Specific matters for the revitalized PRC to consider include ensuring efficient and quality service performance. On recurring basis in recent years the Postal Service has been unable to meet on-time delivery goals for all segments of First-Class Mail, further eroding consumer confidence in core monopoly services. Adequate enforcement mechanisms in this area are necessary to alleviate downward trends and also ensure that billions of dollars of promised savings can be realized following past initiatives to intentionally relax delivery standards.
ACI has further advised maintaining usage of the current price cap mechanism. For all products captured within a prospective Universal Service Obligation, in addition to services in competitive markets, and also ancillary products and exploratory services, the USPS should be forcefully incentivized to reduce costs wherever possible. Identifying service expense limitations must be a fundamental exercise for informing pricing, and ultimately, for properly evaluating the long-term sustainability and profitability for all services. Adherence to core rate mechanisms is essential for deterring cost, revenue, profit and risk shifting, which effectively subjects market dominant function to prop up package services and a variety of other competitive market activities.
Governors Barger, Bloom and Martinez, as well as Commissioners Fisher and Poling will undoubtedly have much work ahead of them. The PRC is led by Chairman Robert G. Taub, and Commissioners Mark Acton and Michael M. Kubayanda. The USPS Board of also consists of Chairman Robert M. Duncan, Postmaster General Megan Brennan, along with David C. Williams, and Ronald A. Stroman.