For most Americans, dropping off mail at the post office doesn’t put too many miles on the odometer. In fact, there are over 30,000 post offices across the country and 95% of the population lives within five miles of a post office.
Some of these post offices may soon stop offering full services to consumers. Recently, advocacy group Save the Post Office released a map of the first 144 offices that would lose carrier operations and see cuts to staff and services under the Postmaster General’s “Delivering for America” (DFA) plan. Louis DeJoy. While it’s easy (lazy) to institute service cuts to save money, the United States Postal Service (USPS) would be far better off adopting innovative trade deals instead. The Postmaster General does not need to sacrifice agency credibility in the name of solvency.
Americans first got a taste of USPS service cuts at the height of the pandemic. A perfect storm of carrier sick days, COVID-19 restrictions and trucker shortages has resulted in delivery issues and long lines at post offices. There has since been a significant rebound in customer service satisfaction and delivery times, but that could change again if the post office consolidations go as planned. According to the map provided by Save the Post Office, post offices that will experience service cuts tend to be clustered around other post offices scheduled for cuts. For example, 13 post offices in the Gainesville, Florida area would have reduced operations under the current plan. Similarly, 17 post offices in the Topeka, Kansas area would reduce operations for consumers.
The dismantling or even closing of post offices is often justifiable. A 2021 report by the USPS Inspector General notes that “of nearly 13,000 underwater post offices, a quarter are within three miles of another post office and more than half less than five miles”. The U.S. mail carrier could close thousands of money-losing post offices while maintaining easy access to nearby post offices. The problem is that postal leadership drastically reduces operations in large clusters instead of targeting underperforming offices.
Even though the USPS could carry out a finely tuned shutdown/consolidation schedule, the agency can do a lot more to get back into the black. The USPS can save money on carrier operations by learning from its private competitors and contracting out some “last mile” operations. Fortunately, the USPS has a program in place to outsource last-mile deliveries to individuals and shippers.
The agency sometimes uses its contracted delivery service (CDS) to compensate private parties to get mail from point A to point B, helping the USPS fulfill its universal service obligation. But these outsourced services represent only a small part of overall postal deliveries. CDS contractors deliver mail to approximately 3 million delivery points per year, compared to approximately 160 million delivery points nationwide. These deals with private companies and individual contractors cost the agency about $400 million a year, compared to more than $80 billion in total USPS annual operating expenses.
The USPS could also partner with companies with large retail footprints to save on large, fixed infrastructure costs. The biggest obstacle to this economic alternative is the power of the postal unions. When the USPS and Staples launched a pilot program in 2013 to provide postal services at hundreds of the retailer’s locations, the American Postal Workers Union (APWU) cried foul and launched protests and lawsuits. against the agency. The promising partnership, which reduced costs for the USPS and expanded options for consumers, was ultimately killed by a 2016 National Labor Relations Board ruling at the instigation of the powerful union.
Future pilot programs could realistically pick up where the USPS-Staples partnership left off. But that would require sustained dialogue between the USPS, its most powerful unions, and Congress to foster a compromise that would make everyone happy. Despite the inevitable objections that would be raised to these changes, retail partnerships and private contracts are much better alternatives to the status quo of slowdowns and service reductions. The USPS must continue to serve the American people even when the going gets tough.
Ross Marchand is a senior researcher at the Taxpayers Protection Alliance.