Posted 11/3/11 by Matt Brown
We’ve blogged previously about the financial and bureaucratic troubles facing the United States Postal Service. On Wednesday, the Senate announced details of a bill that would provide it some relief—but still does not free the beleaguered American institution to operate as it sees fit. Without more fundamental change, the USPS is still on the brink.
On Monday, the New York Times reported on how several European postal services got out of a similar mess caused by: the steady switch from paper to electronic communication, stiff competition from private delivery services, and a massive and increasingly irrelevant infrastructure and real estate portfolio. Where the American system has remained locked in an organizational structure that predates the Nixon Administration, European systems have radically altered their business practices. In the past few decades, the German postal service shed all but 24 of its 29,000 properties (becoming primarily a tenant in other existing businesses) and 100,000 workers, began aggressively competing in new markets by selling everything from DVDs to umbrellas, acquired a private parcel delivery firm to ensure its continued competitiveness in the package delivery sector, and developed innovative services like online bill collection systems.
There’s no question why the German postal service is thriving while the American one continues its march towards default. It comes down to Congress’s regulatory stranglehold on the USPS. Unlike its German counterpart, which is admittedly privatized, the USPS is purposely prevented by its regulators from making rational business decisions in response to changing conditions, or from expanding into new markets. It surely cannot operate this way forever.
As we’ve said before, the solution is simple: free America’s postal service from its regulatory shackles. The changes currently being contemplated by Congress are a step in the right direction (they authorize some discretionary branch closings and staff buyouts). But to ensure the viability of the USPS well in to the 21st century, bolder action is required. Congress should replace the rigid rules that currently govern the USPS’s actions with a simple set of broad mandates: to deliver the mail promptly and accurately, to serve as many communities as frequently as is feasible, to adhere to labor practices that balance fairness and expediency, and to submit to a yearly audit. America’s postal services has plenty of smart people. It shouldn't always need Congress’s “stamp” of approval.Comment ›