Posting another loss and a Senate vote: the problems faced by the United States Postal Service

The news that the United States Postal Service has again recorded a loss for the first quarter of 2014 will not come as a surprise to most. In what has become something of a habit it has recorded 19 losses from the past 21 quarters. With first class mail volumes on the decline the immediate future looks a little bleak.

However, all is not lost as the Postmaster General, Patrick Donahoe, remains committed to the proposed 5 year plan to rescue the floundering service. One of the leading suggestions from said plan is the reduction of delivery days from the current six to five – thus removing Saturday mail deliveries (yet retaining Saturday parcel deliveries to take advantage of the e-commerce boom).

“Everybody’s stupid in an election year”

With such a divisive issue perhaps the biggest roadblock to be overcome is the US Senate’s reluctance to allow a reduction in delivery service. In a year of midterm elections, those in the corridors of power are reluctant to be seen in favour of cutting services – regardless of how sensible the plan appears. As the West Wing’s CJ Cregg eloquently put it “everybody’s stupid in an election year”.

Senate Bill 1486 (postal reform) was recently approved 9-1 in favour by the Senate Homeland Security and Government Affairs Committee. It is now currently making its way through the Senate to a full vote.

The bill does allow for the reduction of postal delivery by the US Postal Service from six days to five if mail volumes fall below 140 billion pieces a year. However, the bill prohibits this reduction from coming in to effect until 2017. What’s interesting to note at this point is 2017 is the year the US Postal Service itself predicts the required threshold decline in volumes will be reached. It would seem the reduction of service is inevitable; it’s just a battle to decide how soon.

It is a changing landscape for postal services, not just in the States. There is an urgent need to adapt and engage with the services customers now not only want but require. However, it’s not all doom and gloom with USPS as within the news of massive losses this quarter came the glimmer of better things to come in the form of increased revenue in shipping. The boom in e-commerce is undoubtedly going to be the stand on which many a postal service hangs its hat.

So the question remains how can the USPS become profitable and deliver the service many Americans demand? The United Kingdom has recently privatised part of its national post service in a bid to pump in more capital, Canada is eliminating home deliveries in cities and New Zealand is reducing delivery days to just 3. In comparison the six to five day USPS proposal looks rather tame.
Eyes are now on the Senate where the USPS bill moves to a full reading.

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One thought on “Posting another loss and a Senate vote: the problems faced by the United States Postal Service

  1. Pingback: Friday Afternoon with February’s Best Bits | the Ti blog

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