August 16, 2011

How to Reform: Postal Service Business Model Doesn’t Work for 21st Century

Maurice P. McTigue

Vice President, Outreach

The U.S. Postal Service has been struggling financially for years, and on Friday, it presented a plan to Congress that would cut the USPS workforce by more than one-third by 2015. The federal government needs to decide if the postal service is a business or a welfare/charity organization. It’s trying to run a 1920s business in a 21st Century economy.

Congress is not allowing the postal service to make the business decisions it needs to make in order to be competitive today. These decisions include having control over closing post offices,  laying off workers, and the price of postage.

The current system is poorly configured with archaic facilities in the wrong places. Post offices should be where people go, like grocery stores and malls, so people don’t have to make a special trip.

In order to compete with UPS and FedEx, the postal service needs to meet their standard of quality. It needs to develop a strategic goal of delivering all the mail in every significant community in the United States within 24 hrs. It can’t develop a strategy like that with Congress micro-managing its affairs. Delivery quality is already poor, so a solution like moving to a three-day delivery schedule would be suicide.

The real responsibility of government is to make sure that we have the means to communicate with each other, and physically move goods from one place to another. However, it’s not the government’s role to provide that service.