Postmaster General Louis DeJoy has decided to finally do what everyone has been demanding for ages and institute a plan to end the Postal Service’s perennial budget shortfalls. Of course, when you order somebody to fix something, not everyone is going to be happy with the result. DeJoy’s proposal involves cost-cutting measures and additional revenue. When described in that fashion, it makes perfect sense. Those are the things that any business has to accomplish if they’re running in the red. But the path to achieving that goal will involve slowing down mail delivery by mostly eliminating First Class mail and raising the costs paid by customers. (NBC News)
U.S. Postmaster General Louis DeJoy is set to implement a new strategic plan that includes higher postage rates and the elimination of first-class tier of mail, two sources familiar with the move told to NBC News on Friday.
The plan to eliminate first-class mail, which includes letters, magazines, catalogs, among others, would slow down mail that typically arrives within two days and make it more costly to deliver for both consumers and businesses.
The Washington Post … reported that all first-class mail would be lumped into the same three- to five-day window as non-local mail. This comes as the postal service under DeJoy, a top donor for former President Donald Trump, has already seen serious delays in mail delivery over the past several months.
As we’ve discussed here in the past, the Post Office faces some challenges that are both unique and daunting in terms of meeting its goals. It’s a quasigovernmental agency, in that keeping it in operation is constitutionally mandated, but it’s not allowed to rely on taxpayer money to make it function. But unlike a private sector business, the US Postal Service can neither declare bankruptcy to go out of business nor control the prices it charges for its services without government approval.
This places the entire operation in an untenable position. Compounding its problems is the government mandate forcing the Postal Service to deposit massive amounts of money in a trust every year to ensure it can pay the overly generous retirement plan costs of all its workers for the next half-century. (That’s the chief driver of the losses they report each year.) There’s a plan under consideration in Congress to do away with that requirement, but it still doesn’t solve the Post Office’s long-term challenges. So will DeJoy’s plan work?
Raising the postage rates should be a no-brainer, assuming you can get enough members of Congress to go along with it. Postage is still ridiculously cheap when you consider the service you’re receiving in exchange. You can take a document, stick it in an envelope and have someone come to your home to pick it up. They then take it virtually anywhere in the country using both airplanes and vehicles as required. And you pay fifty five cents for that? They should be allowed to double their rates in my opinion.
I’m not quite as sure about the idea of doing away with First Class mail, though. When you’re talking about slowing down the mail even further, you have to keep in mind that it’s already so slow in some places that people are being told to go pick up their own mail. Still, if such a move would really reduce costs I’d be all for it, but I’m not seeing how that would work. How does slowing down the delivery of the mail translate to saving money or using fewer resources if you still have to transport the same total volume of mail? I suppose if it meant fewer plane flights would be required or if it cuts down on overtime, there might be some savings. And if that’s the case, then I say go for it.
Of course, every time the Postal Service tries to make changes to make itself financially sustainable, people immediately start complaining. NBC News quotes the president of the American Catalog Mailers Association, saying, “Now is not the time to aggressively increase prices when so many businesses are struggling and hanging on by a thread. Higher prices will force more mail out of the system and contribute to a postal system death spiral.”
It’s the same old story. Everyone wants what they want but they don’t want to pay for it. If the major catalog companies had to switch over to UPS or FedEx, I’d wager they’d be paying even more.
It remains to be seen if DeJoy will be around long enough to implement the plan anyway. He was a big Trump supporter and I’m pretty sure Joe Biden would have already fired him if he had the ability. But the Postmaster General isn’t appointed by the president. He’s selected by the Postal Service Board of Governors. There are currently four seats open on the board, though, so if Joe Biden can fill all four of them with his own cronies, they’ll probably have enough votes to show DeJoy to the door.