The United States Postal Service recently raised parcel shipping rates and announced that its first-class mail would no longer come with a two-day guarantee, except for nearby mailboxes. It also launched a check-cashing program.
These actions have critics, inside and outside of Congress, going postal. Democratic Sen. Mark Warner of Virginia called the delivery delays “just inexcusable.”
“What if McDonald’s ran the post office?” began one column in Miami Today arguing that we’d get better delivery and fries with that.
But one Postal Service critic had some positive things to say about most of these actions. Kevin Kosar is a scholar at the American Enterprise Institute and a co-author of a new paper on the government agency’s secretive and often frustrating procurement process.
“There long have been critics who accused the USPS of underpricing their parcels for the sake of gobbling up the agency’s share of the parcel market,” Kosar told the Washington Examiner.
“The law forbids the agency from using revenues from its monopoly line of business (paper mail) to subsidize its competitive products and services (parcels),” he added. “Hence, raising its parcel prices probably is a healthy sign — even if consumers and shippers do not like it. Regarding the USPS slowing down some first-class mail — it previously did this in 2014, so the move is not unprecedented. Of course, this decision frustrates mailers, but it could prove a net positive if it enables the USPS to more consistently deliver mail within an expected time frame.”
On the other hand, Kosar thinks the check-cashing program is “an unwise experiment.”
“The overwhelmingly bipartisan 2006 Postal Accountability and Enhancement Act directed the USPS to limit its activities to providing postal services,” Kosar said. “So it is troubling to see the USPS baby-step into banking in response to pressure from the far Left and postal unions. It seems needless, as only 1.2% of the unbanked, 200,000 people, blamed their plight on private banks’ failure to offer desirable products and services. And certainly, the USPS is not going to make much money doing this.”
USPS spokeswoman Kim Frum reported that the pilot program, being tested out in four locations, “is an example of how the Postal Service is leveraging its vast retail footprint and resources to innovate,” and she added that these sorts of innovations are part of a “10-year plan to achieve financial sustainability and service excellence.”
The parcel shipping hike came on top of another recent rise in postal rates and is justified to accommodate seasonal demand. So the Washington Examiner asked the USPS for an assurance that this hike will only be seasonal.
“The temporary price adjustments, which anticipate fall and peak-season volume surges similar to levels experienced in 2020, will be in effect from midnight, Central time, on Oct. 3, 2021, and remain in place until midnight, Central time, Dec. 26, 2021, and will not affect international products,” Frum said.
The USPS is exempt from standard government procurement rules because it is meant to be self-sustaining. Kosar said he thinks that’s generally a good thing but argues that Congress should force greater disclosure of its performance data and procurement process.
Kosar’s paper points to the agency’s drawn-out, secretive deliberations over a new fleet to replace the old postal vehicles as Exhibit A in why more transparency is needed. A bidding process that began in January 2015 took until February 2021 for the USPS to award a contract for its next-generation vehicles. These will eventually replace the old ones that are repeatedly and in great numbers catching on fire because “the trucks are simply too old and are deteriorating on the road.”
The first vehicles in this new class “are estimated to appear on carrier routes in late 2023,” Frum said.
Perhaps just in time to help with that year’s holiday rush.
