Recently, it seems that not a week goes by without some news outlet trumpeting the imminent demise of the United States Postal Service (USPS).
The USPS—along with the likes of Kodak and Hewlett-Packard—has been accused of failing to deal with the realities of the 21st century: the world is becoming increasingly dependent on modes of communication that exist beyond the physical realm.
Some commentators argue that the USPS has had its day and should be allowed to die. These assessments base themselves upon the cold, hard mathematics of the marketplace while wholly failing to consider the disastrous consequences should the USPS collapse.
I wouldn’t dispute that the postal service is hemorrhaging money: every day the USPS loses up to $36 million and annually it loses billions (last year alone, it reported a net loss of nearly $16 billion).
Yet, it may come as a surprise that the postal service made a profit of nearly $1 billion as recently as the 2006, the same year (not coincidentally) in which it delivered an impressive 213 billion pieces of mail.
Every year since has been marked by losses of incredible magnitude, beginning in 2007 with a reported net loss of $5 billion. This came after the organization delivered only 800 million fewer pieces of mail, hardly enough to change its financial situation by so great a number.
The problems stem largely from the USPS’s status as a quasi-governmental organization.
Although it traces its origins to 1775—when the Continental Congress appointed Benjamin Franklin as first Postmaster General—the USPS assumed its current form in 1971, when it was essentially made independent of the Federal government for purposes of day-to-day operations.
In 2006, the Republican-controlled Congress passed the Postal Accountability and Enhancement Act (PAEA), which dealt a blow to USPS’ transformation into a pseudo-corporation.
It is a supreme irony that the self-styled pro-business party should have drafted an act so poisonous to a corporation whose very existence is guaranteed by the Constitution.
In the world of corporate personhood, one might even characterize PAEA as outright murder. The act forces the USPS to pay for future retiree health benefits, at the cost of tens of billions of dollars each year.
It also prevents the agency from undertaking important steps that would easily save it billions in unnecessary costs, by eliminating Saturday delivery or by consolidating sorting centers.
In fact, Congress has “too many conflicting and inconsistent demands,” for the USPS, according to postal policy consultant James Campbell.
Only postage rates are an effective means for the agency to raise revenue—this month, the cost of sending a standard first-class letter went up to 46 cents and the cost of sending the same letter overseas rose to $1.10.
Even so, the fact remains that these are some of the lowest prices for mail in the developed world. People don’t seem to realize how extraordinary it is that the USPS will deliver between any two points in the United States (including Puerto Rico and Guam) for less than two quarters.
Neither FedEx, nor UPS nor any other courier service in the world can offer a better deal.
So low is the cost of sending mail in the United States that the price doesn’t seem to relate to the number of people to which the USPS is legally obliged to offer delivery service: over 151 million households and businesses.
By comparison, the Swiss Postal Service (serving a country roughly the size of Maryland and a population similar to Virginia’s) asks for the equivalent of a dollar to send a letter nationally and double that for mail being sent outside of Europe.
More expensive stamps only partially explain why the Swiss Post reported nearly a billion dollars in profits for 2011. Another important factor in its financial success comes from its status as a government-owned company that is allowed to act independently.
This has offered the company a certain degree of flexibility to adapt to the new realities of the marketplace, including the ability to close unprofitable post offices, expand its financial services wing, and expand into areas of interest that go beyond the parcel and letter delivery.
It is a model common to many postal services, including those in France, Italy and Germany, to name a few. Their key to success is autonomy, something that the USPS desperately needs.
For now it will continue to be beholden to the whims of lawmakers, whose supposed commitment to their nation’s postal service is nowhere to be seen.
Essential cost-cutting measures are held up in Congressional deadlock, and the prolonged wait continues to push the USPS closer to the brink.
Now, more than at any other time during its long history, the agency needs the autonomy to adapt to the 21st century. Over the course of its 238-year existence, the USPS has survived wars, economic collapses, and natural cataclysms, and persistently endured through the term of every single President.
Whether or not it can survive the partisanship of modern-day politics remains to be seen.