The Postal Service Needs To Overhaul Its Leadership And Get Its Act Together

Newman from Seinfeld in post office gear YouTube screenshot/Pashatube

George Landrith Since 1999, George Landrith has served as the President of the Frontiers of Freedom Institute – a pubic policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government. The Institute maintains offices in Washington, D.C., Virginia, and Wyoming and has thousands of grassroots supporters in virtually every state. The Institute is recognized as a national leader on the most important issues facing America today, including: national security, market-based environmental solutions, energy, property rights, taxes and regulation. Previously, he served as the Vice President and General Counsel to the National Legal Center for the Public Interest. Mr. Landrith is a graduate of the University of Virginia School of Law, where he was Business Editor of the Virginia Journal of Law and Politics. He also graduated, magna cum laude, from Brigham Young University studying political science and economics. Mr. Landrith is admitted to the bar in Virginia and California and is a member of the United States Supreme Court bar. In 1994 and 1996, Mr. Landrith was a candidate for the U.S. House of Representatives from Virginia's Fifth Congressional District. He served on the Albemarle County School Board. He was appointed by then Governor George Allen and confirmed by the General Assembly to serve on the Virginia Workforce 2000 Advocacy Council. Mr. Landrith is an adjunct professor at the George Mason School of Law. Mr. Landrith has appeared frequently on television and radio news programs and his work has been printed in over 100 newspapers across the nation, including: Washington Times, Chicago Tribune, LA Daily News, National Review, Sacramento Bee, Ft. Worth Star-Telegram, Providence Journal, and Human Events. He has been quoted in many of the nation’s leading papers, including: New York Times, Wall Street Journal, and Washington Post. Mr. Landrith lives in Virginia with his wife, Laura, and their seven children.
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With tax reform now in the rear view mirror on President Donald Trump’s list of priorities, it is clear now that he has another mishandled federal issue in his sights – the U.S. Postal Service. In a tweet posted just before the New Year, the President asks why the USPS is, “charging Amazon and others so little to deliver packages, making Amazon richer and Post Office dumber and poorer?”

This consternation refers to an analysis conducted by CitiGroup, which found that Amazon deliveries received an astounding average subsidy of $1.46 per package. Multiply this giveaway by hundreds of millions of packages that are captured by the secretive deal (known as a Negotiated Service Agreement) and it appears that USPS’ package losses surely are tremendous.

Even worse, Amazon may also be causing the  integrity of USPS to deteriorate. In fact, reports from California, Utah and Georgia indicate that the Postal Service has been falsifying Amazon package deliveries. These cases represent actual systemic problems where staff say they are given direct orders to lie about package drop-offs in order to create an illusion that USPS is meeting the standards that were promised for Amazon.

Putting a greater on focus on package deliveries has come a significantly high cost for the Postal Service. For perspective, as the USPS has increased its parcel quantity, the agency’s controllable costs have risen from $66 billion in 2014 to $71.6 billion projected for 2018. This kind of escalation proves greatly challenging as Postal leaders provide below-market prices just to keep retailers from abandoning USPS service.

In order to compensate for this financial quandary, the Postal Service has numerous ill-conceived mechanisms in place. Primarily, individual postal customers, smaller retailers and e-tailers, and other domestic businesses shipping items are forced to pay higher prices since they cannot access the same generous rates that are available to Amazon.

Furthermore, the Postal Service has willingly accepted an unbalanced international pricing structure. This deal written by the Universal Postal Union (essentially the UN for postal issues) has kept rates exceedingly low for foreign merchants sending items to the United States. If the President isn’t pleased with Amazon getting deals from the Postal Service, surely he cannot be pleased about Chinese shippers getting lower prices than Americans businesses to ship the same size items thousands of miles further.

Lastly, the Postal Service is seeking to balance out its finances by forcing more money out of stamped letters, its most common product. The USPS will do this thanks to its regulator (The Postal Regulatory Commission) which is now repealing much of nation’s sensible mail pricing structures. Lawmakers have relied heavily these restraints to keep the USPS government-granted monopoly from bilking millions of ordinary customers each day.

To put the existing price system in perspective, the Postal Service already generates an average of $1.25 in profit for every First-Class and Standard Mail letter. Thus, it is puzzling why federal regulators would allow the Postal Service raise price well beyond the rate of inflation.

If the USPS really wanted to rationalize its finances the agency should address staggering losses driven by Standard Mail Flats and Parcels. In 2016 alone, the USPS suffered a loss $632 million as a direct result of making 6.3 billion of these deliveries.

With these kinds of deficits, the approach of Postmaster General Megan Brennan is greatly disconcerting. Referring to USPS’ operations, she maintains we “are proud of our achievements in significantly growing our package business.”

As Postal management maintains baffling satisfaction with losses, the nation’s taxpayers should now have deep concerns. Specifically, USPS is dangerously spiraling towards a potential bailout by the federal government to salvage the agency that has been encumbered by unfunded liabilities totaling more than $121 billion.

This laundry list of USPS lapses in financial management have clearly produced inexcusable results for the nation’s consumers and businesses. In the New Year, lawmakers and regulators must demand greatly needed management changes at the U.S. Postal Service.

George Landrith is the president and CEO of Frontiers of Freedom, a public policy think tank.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.