Can the US Postal Service Bring Forth Effective Change?

Can the US Postal Service Bring Forth Effective Change?

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Money losing government enterprise
paints bleak future for itself

The United States Postal Service (USPS) is a perennial money loser despite raising rates annually and attempting to get its costs under control. Tasked with delivering mail to every address in the nation, the USPS is a bloated government bureaucracy finding itself unable to compete in an age where digital technology and private enterprise have figured out ways of doing what it does faster, cheaper and smarter.

USPSEarlier this week Postmaster General John E. Potter presented a ten-year plan for the USPS to stave off a projected $238 billion short fall over that time. His plan includes aggressive cost cutting including taking as many as 50 possible actions to help the USPS turn a profit. But before the postal service can institute change it must receive permission from its eleven member board of governors, nine of whom are appointed by the president of the United States. The USPS receives its authority from the US Constitution, but has been financially independent since the early 1980s.

“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, stressing that there is no one single answer or quick fix to the crisis.

Over the next ten years, the USPS sees a further 37 percent drop in first class mail service, its bread and butter business. But even if their internal trimming continues apace, the postal service estimates that it will still come up short by at least $115 billion. Therefore, the Postmaster General has suggested that several deeper cuts take place including:

  • Adjust delivery days. Currently, mail is delivered Monday through Saturday at residences, Monday through Friday to most businesses. Some critics have proposed eliminating either Saturday or Monday delivery.
  • Restructure benefits. Health care and pension benefits for USPS employees are among the most generous in the nation. Changing these benefits to line up with the rest of the industry will bring about significant savings.
  • Modernize access. Instead of relying on brick and mortar post office buildings, the USPS might utilize grocery stores, retail centers and other high trafficked areas to reach their customers.
  • Flexible workforce. With tens of thousands of employees set to retire over the coming decade, the USPS may be able to scale back itself back while also cross training employees to take on other tasks.
  • New products. Though not outlined in the plan, the postal service could introduce new products consistent with its business.

Potter said that the business plan is a path to the future, one where the USPS plays an important role in the American economy, while remaining an integral part of every American community and delivering the greatest value of any corresponding post service in the world.

“If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life,” Potter said.

Source: U.S. Postal Service

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