Letter: Privatize the U.S. Postal Service
Published 12:00 am Tuesday, June 30, 2015
I read with utter disgust Scott Hammers’ recent story in The Bulletin regarding the delay in the closing of the U.S. Postal Service’s Bend mail processing center. He points out that mail volumes have fallen over 36 percent in the last 10 years and the USPS monopoly has been running a deficit every year since 2007.
Since the last time Congress supposedly fixed the USPS in 2006, the agency has been losing more than $4 billion per year. Current USPS debt has escalated to in excess of $16 billion.
To add insult to injury, the USPS supports its shortcomings by borrowing from the U.S. Treasury at subsidized rates. The additional subsidy is estimated to cost more than $400 million per year.
With our federal government’s current debt and unfunded liabilities running in excess of $215 trillion, isn’t it time to rethink the perpetuation of this obsolete, inefficient and costly monopoly?
Hammers’ article points out that mail from Central Oregon destined for delivery in Central Oregon is first transported to Portland for sorting and then shipped back to Central Oregon for a second sorting prior to being delivered. Would Fed-Ex or UPS follow this pattern?
In 2013, Accenture conducted a service and efficiency study of 26 global delivery services that delivered 75 percent of the world’s mail. The USPS ranked as the lowest performing postal agency or commercial operator.
The Postal Service was created in the 18th century. Fast forward to today: Faxes, emails and improved phone service have resulted in less personal mail flowing through the USPS each year. Yet our mail is overflowing with business-to-person advertisements and unwanted solicitations.
However, due to the monopoly, people and businesses have no alternatives. Private sector services (e.g., FedEx and UPS) are able to deliver overnight parcels as long as they charge multiples more than the comparable USPS first-class rate.
One can cite any number of government agencies bloated with bureaucracy and costs yet delivering unacceptable service, to wit, Amtrak, Social Security, Veterans Affairs, among others.
Our domestic airlines were deregulated in the late 1970s. As a result, the cost of air travel per passenger mile, adjusted for inflation, has dropped by at least half.
Deregulation of the trucking industry took place at approximately the same time. Savings in transport costs, passed along in the form of lower prices for many products, was estimated at over $100 billion in the first decade.
It is axiomatic that prices of products and services drop when markets and economic freedom force suppliers to become more efficient. America is teeming with entrepreneurs who would love to take a crack at mail delivery.
Other developed nations are showing that postal privatization works. Since 2000, both Japan and Germany have taken dramatic steps in privatizing their postal delivery systems. Even the staid old Brits have taken action. UK’s Royal Mail was founded in 1516. However, in 2013, 70 percent of the shares of Royal Mail were floated on the London Stock Exchange, and the company became a constituent of the FTSE 100 Index.
Unfortunately, serious consideration for the privatization of the USPS will never happen due to the absence of congressional term limits. What politician in his right mind would tackle this issue? Better to kick the can down the road and let our children and grandchildren deal with our massive debt.
The USPS is over 600,000 strong and mostly unionized. Each election cycle, the Postal Workers Union political action committee contributes over $4 million to political candidates.
It’s a shame that our politicians do not have a stronger moral compass to deal with such a compelling issue.
— Jack Petersen lives in Bend.