"The U.S. Postal Service [has]…lost over $1 billion in each of the past six months, and over $12 billion since 2007. And the USPS is likely to default on a $5.5 billion payment due to the Treasury on August 1st. The reason? Congress is trying to act as a board of directors…It doesn't have to be like this. If Congress grants the Postal Service freedom to operate like a business…the USPS will be able to change its business model and delivery network, allowing it to adjust to a new communications marketplace." - Rick Geddes, AEI
Among his key points:
- The rise of email and the lower volumes of mail than in years past are not an insurmountable barrier to viability. The U.S. still sends more mail per capita than other developed countries that have commercially viable postal services.
- The USPS should be privatized and held to the standards of corporate law. This would include creating a board of directors with explicit fiduciary duties to shareholders and creating shares, even if they are first held by the government.
- USPS management should be given the freedom to modernize and curtail its delivery network for a new communications marketplace. The UK's Royal Mail has cut costs by closing the vast majority of their post offices, as has Germany. Each service is now financially viable. The USPS needs similar flexibility.
Rick Geddes is a visiting scholar at AEI. He can be reached through assistant email@example.com (202.862.7197).
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