The U.S. Postal Service is mortally wounded, and Postmaster General Louis DeJoy is twisting the knife, hoping to accelerate its demise. The pandemic bears some responsibility, but of equal significance is a business model that can no longer sustain itself financially. Instead of trying to repair its fundamental problems, DeJoy has been eliminating equipment and curtailing operations so that the USPS will be unable to provide the timely, reliable service necessary for its survival.
How the Bleeding Started
Benjamin Franklin was appointed Postmaster General in 1775 because the infant government recognized the essential need for a mechanism to deliver written documents—the mail. At its inception, Post Office operations were built around the physical delivery of letters and, to a lesser extent later, packages. With the ubiquitous use of email and text messages, mailing pen on paper letters and paying bills by paper check have significantly declined and will likely continue to do so. On the other hand, online buying has skyrocketed, and the USPS has benefited from that business. However, the cost of processing packages is not the same as processing mail while, concurrently, the USPS faces stiff and growing competition from the likes of UPS and FedEx.
Adding to its financial woes, since 2006 Congress has required the USPS to fund its future employee retirement benefits in advance. No other federal agency or private corporation has such a financial burden. Absent this retiree health care mandate, the USPS would not be reporting the same magnitude of losses. Indeed, it might even be reporting operating profits that would allow it to find reasonable and rational solutions to its problems. DeJoy’s drastic cuts only make things worse.
DeJoy and Cost Cutting
The reality of the present operational structure, which includes the retiree health care mandate, does make financial viability doubtful. So the cost cutters have arrived to jettison expenses they regard as excessive. That means altering operating procedures, eliminating or tightly controlling overtime and, where it can, reducing service that isn’t considered profitable. Some would argue this is accepted, basic business practice, as though the United States Postal Service was any old commercial venture. Obviously, that is not the case.
Cost cutting without regard to consequences, has been the strategy taken by new Postmaster General DeJoy. Not surprisingly, service has been dramatically affected. And if cost savings is really a goal, it doesn’t take a keen analytical mind to recognize that removing mail sorting machines doesn’t save money. When in good working order, those machines did the work of several employees. Were those postal employees unneeded and simply sitting around and watching the machine sort the mail? I think not. So, added to the cost of actually removing and dismantling the machines, employees will manually have to sort the same amount of mail. That implies additional postal employees, more time spent working by current employees or just not delivering the mail on time. The latter must be DeJoy’s choice, because that’s exactly what’s happening. Gee, even with no USPS experience, I was able to figure that out.
Ineffectiveness of Cost Cutting
Many familiar with postal operations contend that the loss of service diminishes revenue and negatively affects profitability. If this is accurate, then at the outset, there is no other conclusion than this is a bad decision. But let’s put that aside for the moment and assume that the worst case scenario is that it becomes revenue neutral, or at best, costs decrease and revenue remains the same. However, even under the best short-term result, this is a bad decision.
DeJoy was, and is, woefully ignorant of USPS operational procedures, management, staff, and the consequences of any dramatic changes. Yet he proceeded without first educating himself. In fact, he acknowledged as much when in an internal memo to his staff he said that sweeping operational changes, have brought “unintended consequences” to the U.S. Postal Service.
In his appearances before Congressional committees, his blatant ignorance and incompetence was on full display. Here, in brief, is how he responded to questions about the changes:
- The decision to make changes—remove mail sorting machines and sidewalk mail boxes—was made before his arrival;
- He didn’t know who authorized them;
- He didn’t know why he wasn’t consulted before hand.
Clearly he did not know his subordinates well enough or understand the scope of their responsibilities. However, he was not constrained by his ignorance, and embarked on redrawing the organization chart and changing management responsibilities. He was apparently unaware that timeliness of deliveries is a current problem when he proudly told the committee that the Postal Service had improved its on-time dispatch schedule from 89.4 percent to 97.0 percent on time. That’s a wonderful statistic, except when you take into account the mail and packages that were not loaded on the trucks when they went out for delivery. Someone commented that it’s akin to the surgeon announcing the surgery was successful, but the patient died.
Incompetence or Something Darker
Some might contend that the Postal Service’s dire financial situation dictated the need for drastic action to cut operational costs. But a few weeks ago, Postal management noted in a financial statement that it has sufficient funds to operate normally through at least August 2021. The immediacy of the action was not dictated by financial duress! That piece of information should make everyone wonder what prompted DeJoy’s harmful actions, and whether they grew out of hubris, bumbling, or something darker.
DeJoy is not only ill equipped and ill suited for the position of Postmaster General, he is apparently ethically challenged as well. He has investments in stocks and stock options worth tens of millions of dollars in a USPS contractor, XPO Logistics and $100,000 in stock options in competitor, Amazon. Sounds suspicious, don’t you think? Citizens for Responsibility and Ethics in Washington (CREW) has already filed a criminal complaint against him for violating federal conflict of interest laws.
Historical Role of the USPS
Of more significance to the future of the USPS is DeJoy’s lack of interest or perspective on its historical role. The United States has depended on the U.S. Post Office and the service it provides since we were 13 colonies. The Postmaster General doesn’t appreciate or willfully ignores that the USPS is more than just a business that has to show profitability. After all, no other business was established by the U.S. Constitution: ARTICLE I SECTION 8: The Congress shall have Power . . . To establish Post Offices and post Roads; . . .
The USPS is a unique business, specifically governed by U.S. Law, in this case 39 U.S. Code Title 39— POSTAL SERVICE. The law codifies the specific obligation of the USPS to provide prompt, reliable, and efficient services to patrons in all areas, and render postal services to all communities. Further, in determining its policies, the Postal Service must “give the highest consideration to the requirement for the most expeditious collection, transportation, and delivery of important letter mail.” Perhaps someone should inform DeJoy that the word expeditious means done with speed. It would appear that in his brief tenure, DeJoy has not followed the law.
So what could be motivating DeJoy—wealthy businessman, investor, and contributor / cheerleader for Donald Trump? Why was he put in the job to begin with? Was his loyalty to the President and implied willingness to serve Trump’s interests a factor? I suspect it would benefit both men if the USPS were privatized. As a private company, unprofitable routes could be eliminated, post offices where revenues do not cover costs could be closed and it could become a profitable business. DeJoy could invest in its newly issued stock, groom the business for sale to a competitor like UPS, FedEx or Amazon and reap the benefits as if it were just another leveraged buyout. And if the general public and employees suffered, oh well.
All that could happen, of course. But I believe the stakes are much higher. Donald Trump is currently behind in the polls and is counting on a crippled, hemorrhaging Post Office to win another four years in office. He’s framed mail-in ballots as fraudulent, and he’s led questioners to believe he won’t accept the results of the election if they are not in his favor. Yesterday he told a crowd of supporters to vote twice, once by mail and once in person, to test the system. Attorney General Bill Barr said he didn’t know the particular state laws governing this illegal maneuver. I’m willing to make an educated guess it’s a felony everywhere, Mr. Barr.
But the take home message here is Mr. Trump is obsessed with the mail because he believes he can slow delivery, manipulate the mail-in ballots and convince his conspiracy addled base that he is the legitimate winner despite the facts. Preserving the post office is a high stakes priority every citizen, regardless of party, should care about.
The USPS of the Future
Longer term, the Postal Service’s Mission is, perhaps, the most important element that must be redefined. Once we set forth what we expect of the USPS we can build or rebuild the organization around it. Following the policy set forth in law, it currently states: “The mission of the U.S. Postal Service is to provide the American public with trusted, affordable, universal service. Congress and the President set forth this mission by recognizing the Postal Service’s critical role in commerce and in binding the nation together.”
If this is to remain the mission of the USPS, then it cannot be viewed as a private business in which unprofitable elements can simply be discarded. So the model for the post office must take unprofitable business into account. Presently the USPS is designed to be self-sustaining through the sale of postage and other services. But the advent of online email, billing and payment have caused declines in First Class Mail volume and related revenue. On the other hand there has been growth in processing package volume and revenue.
The Pandemic has exacerbated this trend for an organization that was not built for the present level of different services. Revenue is insufficient to sustain this structure and alternative sources must be developed. Additionally, if this trend is expected to continue, significant changes in physical plant and operating procedures will likely be necessary. That will take a capital investment that cannot be provided by existing cash flow.
Protecting the Post Office
But that is not the immediate issue. Now we must consider those measures that can be put in place to protect Post Office operations, and therefor the integrity of the election, including mail-in votes.
It’s abundantly clear DeJoy cannot be relied upon to assure postal operations are maintained at the level required for on-time mail and package deliveries. But he’s there and will likely remain in place as long as Trump retains the Presidency. So, we must see that his actions are monitored closely and do everything possible to prevent him from doing additional damage to the institution.
The Senate Republican majority cannot be counted upon to address this issue even though it affects many of the their rural communities of support. As far as Congress is concerned, the burden falls entirely on the House, but it is not without arrows in its quiver. It should keep the pressure on DeJoy and other Postal Service management by quickly issuing subpoenas to provide documents requested or answer legitimate questions raised previously. And it must use its contempt power more forcefully against individuals who flaunt those subpoenas.
The media has a role to play as well, keeping the spotlight on this issue and emphasizing the negative impact DeJoy’s policies are having on mail and package deliveries. It must expose delays in deliveries of medications, military mail and general service to rural communities. These are all legitimate concerns, and should be non-partisan.
Rural communities want and need the post office, as do the Armed Services, seniors and every citizen of this country. It should be a sign of patriotism to protect our postal service and insure that our mail is safe, secure, on time and delivered to everyone with an address.
Longer term, Congress must address the role expected of the USPS and whether it can be self-sustaining. It is a government agency that provides a valuable service and is among the most admired institutions in the United States. It is an endangered species and we must protect it from extinction.