With only a few weeks to go before the US Presidential Election, the subject of the U.S. Postal Service’s operational capacities, and specifically, the agency’s ability to handle election mail has drawn an inordinate number of commenters, pundits, and doomsayers into what has been a longstanding debate. Contrary to many insinuations, long-time leaders of USPS maintain that the organization is rightly prepared and that its role in the electoral process has not at all wavered.
The larger issue of mail delays have been an enduring problem for consumers who depend on the Postal Service as a facilitator of commerce. Beyond the high-profile attention-grabbing headlines, the matter is better understood for the impact of numerous complexities, far exceeding what novice postal observers care to acknowledge.
The realities of the Postal Service’s operations, as detailed by the chart below (using the Postal Service’s reported data) indicate the organization’s recurring decline in the timeliness of First-Class Mail. Of particular note, USPS has actually not met any single element of its mail performance targets since 2013.
As the concerns accumulated for the Postal Service during the Obama Administration, our organization sought to elevate the matter through comments submitted in 2018 to the Postal Regulatory Commission. Through these channels and analysis, American Consumer Institute sought remedies for delivery issues while also expressing concerns about the Regulatory Commission’s surprising reluctance to engage in enforcement responsibilities and other measures surrounding the USPS.
The historical views of the Postal Service’s performance data also provide a stark reminder of agency’s most staggering operational overhaul of the decade: the 2015 Network Rationalization Plan. Under the leadership of then-Postmaster General Megan Brennan, the plan accelerated closures of Postal sortation facilities, resulted in relaxed standards for on-time delivery, and led to further inability by USPS to meet the newly relaxed objectives. Despite such drastic overhauls, the Postal Service notably never came under scrutiny for its ability to handle mail-in voting for the 2016 Presidential Election.
Furthermore, the Rationalization Plan to slow down mail were nefariously sold to the public and lawmakers as a means for saving money for the USPS and helping the organization recover from its debilitated financial position and more than $100 billion in unfunded liabilities. Years later, however, the Postal Service Inspector General found that only 5 percent of the savings were accrued through the slowdown plan.
This month, Postal leaders have further transparently provided reasonable assurances regarding letter mail delivery. Performance timeliness indicators, including First-Class Mail (88.74 percent) currently remain well within the “New Normal” of service capacity that the nation’s consumers have come to expect within the past four years.
But perhaps the biggest operational questions involve the Postal Service’s pursuits in competitive services and areas beyond its baseline letter mail obligations. When Postmaster General Louis DeJoy was installed to lead the institution in May, a burgeoning volume of First-Class packages reached their destinations on-time 92.8 percent of the time.
Achieving on-time rates for packages at a better success rate than for core letter mail service reflects a delivery model ushered to the forefront by former PMG Brennan. This regime, which new USPS leaders have the responsibility to untangle, is a model predicated on the idea that package volume is simply a revenue driver. Therefore, with this mindset, ultra-competitive pricing must be utilized where possible as the USPS’ differentiator in order to sustain such volume.
As I have previsouly discussed, however, the Postal Service below-market package pricing amounts to a concerning subsidy due to a lack of clarity about how these competitive products cover commensurate costs to the overall system.
Ultimately, the process of unraveling the Postal Service mail delivery performance remains a multi-faceted responsibility, and especially entails work by Postal leaders, lawmakers, and regulators to trim the agency’s bureaucracy and determine whether the USPS is properly serving American consumers in efficient and cost-effective ways.
Published in The Economic Standard.