New Postmaster General Must Deliver in the Face of Opportunities & Challenges
Just a few short weeks before releasing the U.S. Postal Service’s year-end financial report for the 2019 fiscal year, USPS Postmaster General (PMG) Megan Brennan announced her intent to step down from her post on January 31, 2020.
PMG Brennan took the helm of the Postal Service in February 2015 and, during her tenure, the agency has witnessed continuing transformations in the mailing and eCommerce industries, in addition to tumultuous financial circumstances. During the five year period, the USPS’ net losses have grown by more than $23 billion and the agency’s narrow controllable income gains have evaporated, now adding to its losses. The Government Accountability Office continues to keep the agency on its “High-Risk List” due to the need for action to address its finances.
The next PMG will be elected by the current Governors of the USPS board: Robert M. Duncan, David C. Williams, John M. Barger, Ron A. Bloom, and Roman Martinez IV. This next leader should ideally be well-equipped with strong expertise in organizational and fiscal management in order to take on significant responsibilities that will be required to facilitate administrative and legislative reforms that can genuinely help USPS to achieve a sustainable business model.
Most notably, challenges will include delineating the USPS’ “universal service obligation” through pinpointing essential frameworks of postal delivery including specification of the geographic coverage, frequency of delivery, processing standards, modes of delivery, ranges of products, and rate structures.
While USO topics are likely to spur extensive long-range debate and collaboration, there are several near-term actionable improvements that postal leaders can focus on — such as accuracy in pricing, costing, and overhauls surrounding customer service. If the Postal Service continues to envision itself as a functional, self-sufficient business, it must address these fundamental matters that parallel the efforts that private sector organizations adhere to.
As American Consumer Institute has discussed, the Postal Service has a clear record of pursuing an “onslaught of consumer price gouging.” This primarily came to fruition earlier this year when the USPS imposed the largest stamp price increase in the agency’s history. Much more could also be the on the way if USPS gets the go-ahead on its statutory rate increase that could raise prices by another 40 percent.
Conversely, in the growing eCommerce markets, package prices for e-tailers have remained well-below market price according to industry analysts. Given the vastly different approach to mail and package delivery, new Postal leadership must enthusiastically pursue creation of separate balance sheets for packages to help prevent cross-subsidization between the two business units, and allow for clear determinations of what is profitable for the USPS and what isn’t.
Furthermore, many have lamented the USPS’ decline in trustworthiness with respect to the service quality for increasingly expensive mail services that millions face across the country. Specifically, ACI has asked Postal leadership to “be exhaustive in using all tools available at its disposal to compel meaningful changes in behavior on the part of the USPS.” In 2018, on-time delivery frequency declined for every USPS First-Class Mail product — a severe disservice to all who use the mail system.
Overall, the new Postmaster General must certainly recognize that the USPS has an important role to support a thriving U.S. economy. In order for it to achieve long-term sustainability, major reforms to prioritize USPS’ fiscal transparency and accountability to its customers will be essential.
Steve Pociask is president and CEO of the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.