By law, the vast majority of all USPS positions are held by unionized federal employees who have robust job protections. USPS has 500,000 employees and 600,000 retirees who receive health and pension benefits. Thus, the agency’s compensation costs rose $2 billion since 2015. Mail volume is sliding. Less mail means less money. Packages remain a paltry portion (four percent) of what the postman carries. And it is not at all clear if the USPS reaps profits on carrying parcels. Boxes brought in a whopping 28 percent of USPS revenue last year, but the agency’s accounting for the costs related to carrying packages (which obviously are bulkier than letters and magazines) cannot be found in either its annual report or year-end financial statement. That I can purchase a polyester trombone case online for $20 — and USPS will carry it all the way from California to Washington, DC, for a portion of that purchase price — gives wonder. Good luck finding a private courier who would charge so little.
The Postal Service’s business model is broken. The demand for its services has plummeted, and private couriers and 21st century delivery modes (drones and delivery robots, for instance) pose tough competition. USPS likely will continue to lose money despite the efforts of its employees and leadership.
Making the Postal Service viable for the 21st century will require a top-to-bottom rethink. Parcels priced at profitable rates may be a part of that new model, but more widespread, robust change is needed, lest taxpayers wish to find themselves bailing out the Postal Service.