Making the Mail Snailier

The U.S. Postal Service will never have a bright fiscal outlook, but it’s going to be vital to our communities and our economy for a long time to come. Should we just keep cutting, or is it time to rethink the mail from scratch?
by | May 16, 2012
 

If you want to send a birthday card from your home in Anchorage to your aunt in Key West, the U.S. Postal Service will deliver it for 45 cents. If you want to send the same letter via United Parcel Service, it will cost you $28.05. At least that was the price the last time I checked the UPS online rate calculator. The rate may have gone up or down since then because UPS, Federal Express and their competitors, unlike the Postal Service, can change their rates as much as they want, any time they want.

That 45-cent stamp is central to our ongoing debate about our beleaguered national mail service. What's odd about that discussion, however, is what isn't being debated.

It might seem amazing that the Postal Service can somehow makes a profit on 45-cent first-class mail, but it does. The problem, of course, is that there is less and less of it — first-class mail volume has fallen by 30 percent in the last decade — as we all depend more and more on email and online transactions to stay in touch, buy things and conduct our business. What the future holds is mail volume that will ever diminish but never completely disappear.

With the Postal Service drowning in billions of dollars of operating losses and employee-retirement obligations — it lost $3.2 billion in the first quarter of this year, $1 billion more than in the same quarter a year ago — the talk in Washington is entirely about cut, cut, cut: Reduce mail-delivery frequency, shed employees by the tens of thousands, close facilities nationwide. Keep cutting until the deficits disappear, and when they reappear, cut some more.

The debate isn't about whether to cut but where to cut. The most hard-line of the fiscal hawks in Congress may want the Postal Service to be lean and efficient, but not at the cost of closing post offices in their own districts. That's why the Postal Service just last week backed away from its plan to close 3,700 post offices, mostly in smaller communities — which of course just serves to underline the importance of the postal system to individuals, communities and businesses across America.

The other solution heard most often is to just privatize it. That sounds simple, but it could mean a lot of things: shutting the Postal Service down, laying off its employees, selling off its assets and letting the free market take its course; ending the Postal Service's monopoly on what can be placed in a mailbox; turning it over to a private entity to run as it sees fit; contracting out services now performed by postal workers; or elements of all of these.

But does anyone really believe that Post Office Inc., freed to set its own prices at will just like UPS and FedEx, would be willing to deliver a letter from Anchorage to Key West for just 45 cents? Imagine the political fallout when people discover that their "Forever" stamps aren't forever at all. As a taste of how things might go, look at Chicago, where residents are hopping mad about skyrocketing parking rates that have followed a $1 billion deal to lease out the city's parking meters for 75 years. Closer to the subject at hand, consider the ruckus that erupts now when the Postal Service asks its regulatory commission to let it raise the price of a first-class stamp by a penny. And that doesn't take into account the impact of a reconstituted Postal Service on business, which now originates about 90 percent of mail volume, from magazines to catalogs to package delivery.

Ultimately, some form of privatization may indeed be the way to go. While that would be an undertaking that would make Chicago's parking-meter deal look like a pocket-change transaction, it wouldn't be without precedent: Much of Europe already has privatized mail services to one degree or another. In fact, the U.S. Postal Service is already something of an odd sort-of-privatized duck. Since 1970, it has been an independent agency of the federal government — a change aimed primarily at reducing political interference in its operations; we all know how that worked out — with a mandate to run itself like a business and break even in the process. (Good luck finding a private operator to take over a service with a mandate to merely break even.)

The pre-1970 U.S. Post Office was a standard federal department (the postmaster general was a cabinet member) with no mandate to make money or even break even. Its job was to "bind the Nation together" through commerce not only in goods but also in ideas. Letters and newspapers may have moved at the speed of a walking horse, but they were eagerly awaited. And the mail service has always had its issues with new technology: The Pony Express (a private operation, by the way) was killed off after 18 months by the telegraph.

If we still consider the mission of our national mail carrier to be as vital as did Benjamin Franklin, our first postmaster general, maybe it's time to acknowledge that endless service cuts and efficiency initiatives will never end this fiscal headache. Maybe it really is time to just privatize it. Or should we rethink the basic structure of this institution? Is a government-subsidized mail carrier just something that, like the Defense Department, we simply must have and therefore must be willing to pay for? Are we having the wrong conversation about the Postal Service?

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