Evaluating Rumors About Potential USPS Changes

The possibility of Postal Service price changes was usually an issue discussed only within the mailing industry, but the politicization of the agency over vote-by-mail and other matters has resulted in postal news appearing in the general media.  However, this phenomenon has resulted in articles being published that are based on incomplete information, rumors, or speculation, derived from “unnamed” or unofficial sources, and produced by writers inexperienced in dealing with the arcane world of the USPS.

Changes ahead

The latest report – in an August 20 article in The Washington Post – cites “four people familiar with Postal Service discussions” who claim that, after the elections, Postmaster General Louis DeJoy will initiate changes aimed at “raising package rates, particularly when delivering the last mile on behalf of big retailers; setting higher prices for service in Alaska, Hawaii and Puerto Rico; curbing discounts for nonprofits; requiring election ballots to use first-class postage; and leasing space in Postal Service facilities to other government agencies and companies.”

The Post also claimed that “the most significant potential changes would allow the Postal Service to transport its most profitable products — first-class and marketing mail — and periodicals via trucks and trailers, rather than airplanes.”

Perhaps inadvertently reflecting the shallowness of the reporter’s understanding, the article noted that “It is unclear which of the ideas DeJoy can enact unilaterally, and which require the review of the Postal Regulatory Commission, USPS’s governing board and Congress.”

Opinions

Because postal issues recently have become entwined in politics, the Post duly repeated the backstory of DeJoy’s political activities and his connections to the White House, including the president’s comments about the Postal Service.  Offering another perspective on what’s allegedly ahead, the article quoted a spokesman for the conservative think tank R Street:

“The theme might be construed as there’s no free lunch. Postal policy has a whole lot of competing objectives.  On the one hand, we’re supposed to have a postal policy that serves everyone easily no matter what the costs may be.  At the same time we want the Postal Service to break even.  For some reason we’re still fixated, despite the mail volume drop-off, to deliver mail six days a week.  It has a highly unionized workforce that bargains for working conditions on the shop floor.  We want a lot of different things, but revenue isn’t what it was 15 years ago and we’re going to have to choose among many different things.”

Sorting it out

Setting aside – if that’s possible – the political overtones that color any evaluation of what DeJoy may propose, the fact is that, before his appointment, there was no small amount of dissatisfaction with the Postal Service.  After having four successive postmasters general come from within the agency, many argued it was time for an outsider to serve in the job, presumably to bring a fresh approach, different ideas, and, in turn, get the agency onto a more stable financial footing.

As a former logistics executive – and, again, setting aside his political activities – DeJoy would seem to be a fitting choice.  Accordingly, he – or any outsider – would look at current USPS policies, including pricing, and question why they are as they are, and what could be changed.  Presumably, making the postal leadership re-examine what it does would stimulate new ideas that, after being appropriately vetted, would be discarded, amended, or pursued.  Throughout, it’s important to note, there’s a big difference between discussing potential changes and implementing them.

Part of the headquarters re-organization DeJoy announced last month included a new functional area, “Commerce and Business Solutions,” tasked to develop new ways to generate revenue, something the Postal Service clearly needs.  Accordingly, any proposals about “leasing space in Postal Service facilities to other government agencies and companies” would seem to be an obvious topic for consideration that’s within that group’s bailiwick.

Meanwhile, it’s normal for the exiting pricing group, with input from others, to develop a list of what could be included in upcoming price change filings, such as changes in rate structure, eligibility, and associated classification requirements.  The exercise typically starts with a much longer list of ideas than what actually gets included in a filing; internal reviews by the group’s managers, approvals by senior executives, and finally approval by the board must occur before the contents of a price filing are finalized.

Therefore, any ideas about “raising package rates, particularly when delivering the last mile on behalf of big retailers; setting higher prices for service in Alaska, Hawaii and Puerto Rico; [or] curbing discounts for nonprofits” shouldn’t be taken as finalized proposals until they appear in a rate filing approved by the governors.  (Requirements for ballots could be handled through a Federal Register rulemaking, though it could also be seen as a classification change requiring PRC review.  Changing modes of transportation are internal USPS decisions, but changes to service standards require PRC sanction.  All PRC filings must first be approved by the governors.)

Good or bad

The growing awareness that the Universal Service Obligation is in need of re-definition, both regarding its requirements and how it is to be funded, could cause many currently off-limits ideas to be examined, such as whether service to remote locations or reduced rates for certain entities should be subsidized by the federal government as a public service.

Whether the USPS could make any such significant changes on its own, even through a PRC filing, overlooks the political aspects of such proposals, underscoring the gap between considering them and implementing them.  Odds are no-one in Nome is going to have to pay a USPS delivery surcharge any time soon, nor should the local church worry just yet about paying more to send out is weekly bulletin.

What should be kept in mind is the very simple premise that any discontent over the current condition, if it’s to be ameliorated, requires change.  Change can be disruptive and result in unpleasant, even if not unintended, consequences.  Therefore, it’s somewhat incongruous, if not outright disingenuous, to on the one hand urge that the USPS change how it operates and does business while on the other hand exclude from consideration any change that might make such an evolution uncomfortable.  We can’t have it both ways.

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