White houses stand behind privatization of postal services
The 70 pages of the recommendations are not directly directed to contracts with individual senders who are confidential. However, if implemented, they can cause interest rates for Amazon and other major e-commerce companies who pay the postal service to deliver packages to remote locations that may otherwise be too expensive to operate.
Treasury-led workforce, which included various agency heads, was consulted with associations representing postal service's major users. They found little appetite for full privatization of the agency, which could have undermined its current mission to earn rural America. The trade unions representing postal workers have carried out a month-long campaign against privatization, and the business groups did not support the idea either.
However, the working group concluded that the post office should act more like a private business in some ways, including having the authority to charge market-based prices for both mail and parcel. Currently, the agency is limited to how quickly it can raise prices, including restrictions imposed by the Congress that prevent it from adapting to a steady decline in the volume of first-rate mail.
In the new business model that the task service requires, the post office will maintain uniform prices for "important services" such as drug and government shipments to all addresses in the country. But it would charge more for "commercial services", including promotional mail and most anything you can order on Amazon.
"Many of the Agency's proposed reforms for pricing, costing and services are designed to create such a transfer of value from commercially oriented products to socially-oriented key services," said the report. "Although the USPS will continue to serve all citizens and businesses in country, the goal of commercial mailers and senders must be to optimize long-term earnings based on market principles, instead of ensuring access to a regulated, unified government service. "
"Then the air can matter to get out of that balloon, "said Sackler. "And if you increase prices significantly, you will not do anything but expedite it."
The report also focuses on cutting costs, including employee compensation, which is still higher than the postal service's private sector competitors despite years of outsourcing and union concessions. A recommendation would eliminate collective bargaining over wages, as is currently the case for most federal government associations.
"This report requires the universal service to be slashed," said Mark Dimondstein, president of the US Postal Union, representing 200,000 of the 643,000 post office employees. "Recommendations will reduce service, reduce delivery days and privatize large portions of public postal services. Most report recommendations, if implemented, will harm both businesses and individuals."
Many of the actions outlined in the report, for example, redefining what counts as an "important" service subject to rate caps can be achieved through administrative action. However, most changes that have to do with the post office's governance structure and employee relationships must go through the congress.
Comprehensive changes, however, seem unlikely, even those now supported by the White House.
"Going through the reform has been an elusive goal," said Michael Plunkett, president of the Association for Postal Commerce, which also represents e-mail. "Some of these things can be done through highly targeted legislation that does not seek to overtake the postal system."
