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October 2, 2020
A USPS Balancing Act—Business vs. Service
By Brian J. Wagner
The U.S. Postal Service’s total revenue in Fiscal Year 2019 was $71.2 billion— enough to place it 43rd on the Fortune 500 if it were a private company. So, the USPS is big business. In reality, how should the Postal Service be viewed—as a business or a public service? How should it be managed—for profit or not for profit? Here’s the scoop.
In the simplest terms, the Post Office Department was first established by Congress under the U.S. Constitution. With the passage of the 1970 “Postal Reorganization Act,” the U.S Postal Service was established as a self-sufficient government agency to serve the American public without taxpayer funding. Today’s Postal Service could be viewed as a business, but a public-service business with a universal service obligation to bind the nation together.
It’s no surprise the Postal Service is considered one of the most consistently popular and trusted entities among federal agencies. In April 2020, the Pew Research Center reported that 91% of the American public approved of the USPS.
In general, a business is owned by an individual, partners or shareholders, with a goal of profitability to maximize the value for its shareholders. However, there are no owners or shareholders of the Postal Service. There are stakeholders, with a vested interest to maximize the intrinsic value of mail delivery to the American public.
So, who exactly are these stakeholders? According to the executive summary in the Postal Service’s “FY2020-2024 Five-Year Strategic Plan,” stakeholders include the president, Congress, the American people, postal employees, business partners and, of course, customers. When NAPS and our members hear U.S. Postal Service, we hear service.
However, recent news stories about mail delays, postal processing machines taken out of service, mandates to reduce overtime, changes in post office hours and concerns about the timely delivery of mail-in ballots for the November election have caused angst among various postal stakeholders regarding the USPS’ current service performance. Such news can negatively impact the longstanding trust the American public has had for the Postal Service and, more importantly, negatively impact the agency’s revenue stream with customers switching to USPS competitors.
NAPS fully supports a viable, highly trusted, efficient and cost-effective Postal Service whose focus is serving the American public. As a postal stakeholder, NAPS is ready, willing and able to provide Postmaster General Louis DeJoy and his leadership team with input and assistance to achieve the agency’s goal of operational efficiency, financial stability and the highest level of trust and service to the American public.
Furthermore, NAPS supports postal legislation that keeps this same, high level of trust and service. We encourage legislation that addresses the impact COVID-19 has had on USPS finances, operations and the safety and security of postal employees. NAPS will continue to seek passage of long-overdue postal reform legislation that includes major components such as repealing the prefunding of future retiree health benefits, fair and flexible postage rates, incentives to develop innovative products and services and protecting the Postal Service’s universal service obligation.
This past June, I had a meet-and-greet Zoom meeting with incoming PMG DeJoy, where he stated the USPS can’t provide service at all cost. That is understandable, as no business can give away the shop if it wants to be financially successful. But it can’t be at the cost of service levels to the American public.
I agree with DeJoy’s Aug. 7 USPS Newsbreak statement: “It is crucial that we do what is within our control to help us successfully complete our mission to serve the American people and, through the universal service obligation, bind our nation together by maintaining and operating our unique, vital and resilient infrastructure.”
In order for this to occur, the Postal Service must find the right balance to provide the highest level of service against the goal to achieve operational efficiency and financial stability. How does the USPS achieve this balance between business and service when challenged with declining First-Class Mail volume, increased package business, current performance issues, efforts to reduce costs, answer to stakeholders and survive as a political football during an election year—all during a worldwide pandemic? Not by eating the entire elephant at one time.
To start, the USPS must have a solid business plan and structure balanced to coincide with current laws, postal policies, sufficient resources (postal capital equipment and employee staffing), operational strategies and schedules. This balancing act must be qualified and quantified with data and analysis to determine the probability of success.
Communicate, communicate and communicate to stakeholders regarding decisions and actions that may impact service to the American public. Lack of communication, inconsistent messaging and misinformation lead to transparency deficiency and skepticism about the USPS.
In an Aug.18 Postal News statement, DeJoy communicated the following to all Americans:
Again, if the Postal Service is to accomplish cost reductions, operational efficiency and financial stability under a new organizational structure and business plan, it must balance the business of the agency with high levels of service to the American public. When the right balance is achieved, the USPS will experience greater service performance, exponential savings and elevated public trust, while, at the same time, securing the agency’s success and long-term sustainability.
I think your waistline may grow exponentially with my October ice-cream-flavor-of-the-month recommendation: Cinnabon.
Categories: The Postal Supervisor