Did you notice the mail service warning last month that the U.S. Postal Service will run out of money by February, unless Congress expands its borrowing authority by billions of dollars?
The Postal Service cited a net quarterly loss of $2 billion as it faces a growing financial crisis after mail volumes fell another 6.3% in the three months ending March 31 — just as operating revenue rose 2.3% to $20.2 billion over the same quarter last year.
So the Postal Service said it would temporarily suspend payments to a federal pension program, and raise first-class mail stamps to 82 cents from 78 cents, effective July 12.
The Postal Service cited soaring net losses of $120 billion since 2007 — as first-class mail, its most profitable product, fell to its lowest volume since the late 1960s.
“We are in a cash crisis,” Postmaster General David Steiner said. “To avoid disruption and to sustain our role supporting American commerce and the public, we require urgent congressional action to expand our borrowing authority and to address outdated constraints on the organization.”
Last month, the Postal Service won approval from the Postal Regulatory Commission for a temporary 8% price hike for priority mail and package deliveries to deal with rising transportation and fuel costs. The Postal Service plans for the surcharge to be in effect through January 17, 2027.
The Trump administration proposals to resolve Postal Service deficits focus on privatization, structural service cuts, reducing workforce and collective bargaining rights.
Privatization won’t work. I’ll address its issues last.
Meanwhile, let us remember that postal service is a social service — just as the building of roads and streets, and providing police and fire protection. They are services provided by our taxes, and they are not expected to pay for themselves. Nor are they expected to lose money in such amounts as billions of dollars.
So it should be obvious that a combination of higher postal rates and service reductions are necessary.
Service reductions suggested by the Republican Party include ending or reducing Saturday mail delivery, closing little used rural post offices, and canceling late-afternoon mail pickups to lower transportation and overtime costs.
Of course, service reductions will hit rural areas the hardest — areas where the service is relied upon the most — and so necessary because of other services lacking in rural areas. Among groups affected the most are indigenous peoples on tribal lands.
Many rural folks get their meds by mail. And many remote areas do not have reliable telephone and internet service. So the reliability of mail service is most important to them.
And they must plan ahead in ordering meds if they expect to receive them when needed. So they likely will need to plan ahead a day or two earlier.
And I agree that reliability is most important, but is that reliability needed daily?
I believe both urban residential and all rural deliveries can and should be cut to three days per week. It could be Monday, Wednesday, Friday for some areas; or Tuesday, Thursday, Saturday for others. That could keep rates within reach for rural customers.
I have talked to many folks who admittedly don’t check their mail daily unless they’re expecting something other than the usual advertisements.
Residential customers need to take this attitude: “We can live without daily service, but we must have the reliability of service three days weekly.”
And if businesses want six-days service, then their rates need to be adjusted to reflect the costs of that service.
Reducing most delivery services to three days weekly will lower operational costs considerably, including reductions in workforce needs and transportation costs.
Of course, considerable planning for such a transition would be needed.
Now, about privatization.
No business man, or woman or group considers starting a business unless there are profits to be made. So let’s consider a few aspects of business operations that government critics ignore. Businesses, whether small or large, have various expenses that governments don’t have.
Number one: Governments do not need to operate at a profit. They do not need to pay high salaries or bonuses. Nor do they need to pay stockholder dividends and members of a board of directors.
Number two: Governments do not need to pay income taxes.
Number three: Governments do not need to spend substantial chunks of money on advertising and marketing, or commissions to sales agents. Think about the billions spent by insurance and drug companies as examples.
Number four: Governments do not need to pay lobbyists.
Number five: Governments do not need to purchase liability or malpractice insurance.
And number six: Governments can borrow money at cheaper rates than businesses.
So how is it that businesses can absorb such additional expenses and provide equivalent services cheaper while making a profit?
Obviously, they can’t.
So privatizing the Postal Service is not an option because no business would consider providing the service unless a profit can be made.
Nor would any consider taking over such a service without carte blanche approval to raise rates and reduce services enough to provide that profit.
Then what kind of Postal Service would we have?
But reasonable reductions in service, with strong emphasis on reliability, can offer some workable solutions.
Darrell Berkheimer is a retired journalist whose career spans 60 years. He was city editor and news editor at The Daily Herald, Provo, during the 1970s and ‘80s. He also filled newspaper editor positions in Pennsylvania, Georgia, Texas and New Mexico, and is the author of several essays books. Contact him at [email protected].