Raise the rates, don't slow the mail
The U.S. Postal Service this month began implementing plans to slow service and increase fees, part of a 10-year plan to make the agency solvent.
On Friday, 20 attorneys general filed a complaint against the agency's strategic plan, saying it puts "our democracy and our people at risk."
The ironically titled "Delivering for America" plan does just the opposite — increasing by two days the window of first-class mail delivery. Letters and bills that once took no more than three days to reach recipients now could take up to five. The price of a first-class stamp, meanwhile, increased this summer to 58 cents, from 55.
The Postal Service, beset by high pension costs and competition from the internet, lost $3 billion in the third fiscal quarter ending June 30. Clearly it needs to do something to right the ship. Reduced service at higher prices, however, will not solve the problem. It's akin to the electric company raising rates while announcing rolling blackouts, or an Uber driver charging you more to arrive at the airport after your flight has departed.
Part of the problem is that the Postal Service is not a private business. It is a federal agency run by the postmaster general, with its rates set by the Postal Regulatory Commission.
Under a 2006 act, the agency is required to prepay its retirement obligations — both pensions and health care. It could not make a $63 million payment in the last fiscal year. But the commission has always been timid about postal rate increases, and this latest is no exception.
Consider that for 58 cents, you can send correspondence anywhere in the United States. If we used stamps as currency, it would take four stamps to buy a cup of coffee and 10 to buy a six-pack of beer. If you hired the Uber driver to take your letter to its destination, it would cost you $1.10 per mile – not to mention the upfront fee and tip. In short, there is virtually no other service or product you can buy as cheaply as mailing a letter.
Not surprisingly, the Postal Service faces blow-back from large-volume mailers whenever it tries to raise rates. This has kept the price of many postal services artificially low and contributed to the agency's red ink.
Postmaster General Louis DeJoy's ill-timed effort to slow mail during last year's presidential election, which included removing sorting equipment, only deepened the Postal Service's problems. Suddenly an agency held in high esteem by the public was tainted with the suspicion of political interference.
There is a way out of this morass, and the Postal Service should look to the competition for ideas.
Amazon has proved that customers will pay for speed and convenience: $119 a year for free shipping. Amazon is adding airplanes and trucks to its fleet to improve speed. Those gray vans you see in neighborhoods all over southeastern Connecticut are Amazon's version of the postal vehicle.
The Postal Service has it half right. Increasing stamp and flat-mail prices and creating a holiday surcharge are justifiable. But it needs to go further. Increasing package handling fees year-round, as well as offering more flexible plans for users, could provide the Postal Service with the revenue it needs to speed up service. The Postal Service could offer a cafeteria of membership plans for frequent customers. It could encourage businesses to stick with snail mail by offering volume incentives.
Meanwhile, the agency's response has been the opposite — slowing delivery by privileging ground transportation over air. The theory is that reduced volume will make it more efficient. This is a zero-sum game that could put the Postal Service out of business.
DeJoy may not be the right leader to do it, but the Postal Service must make attracting and keeping customers a priority. No business can accomplish that by degrading its services.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
Stories that may interest you
An internal investigation by the school board into how administrators handled a complaint of sexual misconduct by a teacher would not interfere with the criminal investigation by police and DCF.
His policy proposals are usually followed by a fundraising pitch from his campaign to potential donors