by Leslie Kamil, OTR/L, MS, JD
U.S. Postal Service leaders have told lawmakers they expect the agency to lose $13 billion this year as the pandemic causes the volume of personal and marketing mail — on which the USPS has its highest profit margin — to fall by close to 20 percent and 45 percent, respectively.
The Postal Service has not taken federal funding since 1970, operating instead from the revenue it raises from stamp sales and other products. But it has struggled as first-class mail plummeted in the Internet era, and is burdened by a congressional requirement to pre-fund its health benefits for retired employees. The agency has stopped making those payments. As it has run up multibillion-dollar debts, Congress has debated new subsidies and business plans to lessen its financial problems — but never agreed on a solution.
The aforementioned article states that although package volumes have surged 70% the contracts with shippers and internet retailers are often discounted to perform “last mile” delivery, or the final leg of an item’s journey, to a customer’s home. These contracts, with both companies and individuals, are analyzed annually for fair market competitive pricing. Higher package rates would cost shippers and online retailers billions of dollars, potentially spurring them to invest in their own distribution networks instead of relying on the Postal Service. Experts say that raising prices as Trump as suggested would be even more harmful to small businesses that don’t have their own distribution networks and rely on the Postal Service as a secure, cheap way to reach customers across the country.
Recent developments show that Trump’s efforts to reshape the USPS are gaining traction. By the end of next month, every member of the agency’s bipartisan governing board will be a Trump appointee. Democratic vice-chairman David Williams resigned April 30, fed up with Trump’s approach to the agency, and last week, the panel announced that it had tapped Louis DeJoy, the finance chairman of the 2020 Republican National Convention, as the new postmaster general. In addition, Deputy Postmaster General Ronald A. Stroman submitted his resignation on May 8. Stroman had years of experience working with congressional Democrats and had become the agency point man on vote-by-mail initiatives for the November election.
The postmaster general and deputy postmaster general also sit on the board, but they do not vote on postal rates or personnel matters.
Several attempts at funding
All attempts at funding the Postal Service have been thwarted.
President Trump threatened to block an emergency loan to shore up the U.S. Postal Service unless it dramatically raised shipping prices on online retailers. But raising USPS prices so sharply may not have the impact the president desires, analysts said, as it would put postal services prices far above those of UPS and FedEx, allowing them to raise prices a little and still gain market share’
Treasury Secretary Steven Mnuchin rejected a bipartisan Senate proposal to give the Postal Service a bailout amid the negotiations over that legislation a senior Trump administration official and a congressional official previously told The Post. Any decision on higher package rates as a condition of the Treasury loan would be up to the agency’s board of governors, which currently has five Senate-confirmed members appointed by Trump.
Most recently, House Democrats have passed the Heroes Act, a $3 trillion coronavirus relief bill despite Trump’s veto threat. This legislation, among other things, would provide $25 billion for the U.S. Postal Service. The Senate shows no interest in acting on another coronavirus relief bill at this time.
Contact your legislators. Tell them that you need affordable and reliable package delivery service more than ever and that funding the postal service is a paramount necessity for the American people.