The United States Post Office lost $8.5 billion last year. If that were any private business, well, it wouldn’t exist any longer.
But not the post office.
Despite a 20 percent decrease in mail volume from 2006 to 2010, and package-delivery competition from UPS and FedEx, somehow the post office stays afloat. But if it weren’t for the federal government propping up the USPS and its first-class mail monopoly, today’s mail system would look much different.
In an op-ed to the Wall Street Journal, Gary MacDougal, writes, “With a well-managed Postal Service wind-down, Fedex, UPS and others could easily and efficiently pick up much of the volume. Some could also be handled by a host of local delivery companies now serving most major cities. Fedex, UPS, DHL, cargo airlines and others can handle long-distance and international shipments. Entrepreneurs will see the demise of the USPS as an opportunity, and new companies will emerge.”
Maybe cutting off the USPS and letting it run as an independent business is just what this country and the post office needs.
As it is structured, it will be nearly impossible for the post office to pull itself out of debt. If mail volume continues to fall while at the same time there is an increase in the number of postal addresses, the cost to deliver each piece of mail will continue to rise and revenue levels will not be able to keep up. On top of this, the USPS had financial liabilities and unfunded obligations of $88 billion in 2009. And its latest mess was only partially resolved when Congress saved the post office from going into default by extending the due date for a $5.5 billion payment due to the U.S. Treasury for retiree health benefits. Also not mentioned are the labor union costs and payouts and the fact that postal workers earn an average of 15 to 20 percent more per hour than comparable workers in the private sector.
No private company with this kind of overhead and poor business structure would be able to last on its own, but by restructuring and breaking free of the government and letting go of its first-class mail monopoly, the post office might just be able to survive.
“Ending the government stronghold on the USPS would allow it to function as a real private business,” says Bill Wilson, president of Americans for Limited Government (ALG). “It is time taxpayers stopped funding a failing government entity. Billions of tax dollars are wasted each year while the post office turns into another example of a failed government attempt to pick winners and losers.”
Would the post office survive without the assistance of the federal government? It very well could, and in fact, those with negative experiences at the post office, including waiting in long lines, poor customer service and the occasional lost package, might find their time at the post office much better and more efficient.
Lifting the first-class mail monopoly would spur competition. The post office would want to keep your business, but companies like FedEx and UPS would also want it. The prices would be right and fair and customer service would only get better.
It’s safe to say that a private sector takeover would be more efficient, productive and user-friendly. The government and USPS itself might find that restructuring its business model into a private enterprise would be in everyone’s best interest.
Rebekah Rast is a contributing editor to Americans for Limited Government (ALG) and Net Right Daily. You can follow her on twitter at @RebekahRast.
Time to end the first class mail monopoly