Reducing the quality of service failed to solve the post office system’s financial woes, according to a report from a watchdog agency tasked with auditing and monitoring the United States Postal Service (USPS).
An October 2016 blog published by the USPS Office of the Inspector General (USPS OIG), which is responsible for “[helping] maintain confidence in the postal system and improv[ing] the Postal Service’s bottom line through independent audits and investigations,” commented on a recent performance audit, finding agency efforts to restructure and provide higher-quality service have failed.
In 2015, USPS implemented a program known as the operational window change, (OWC) lowering customer-service benchmarks by removing overnight first-class mail service and promising to deliver customers’ mail in three days instead of two.
Lowering standards with OWC did not help USPS’ financial situation, USPS OIG wrote in the blog post.
“Our report found that, for the period of January through September 2015: delayed mail processing increased nationwide by 51 percent compared to the same period in 2014; 2-day and 3-day First-Class Mail weekly scores in that period declined by as much as 7 percent and 34 percent, respectively, compared to the same period in 2014, before the OWC,” USPS OIG wrote. “In addition to the service issues, the Postal Service did not save as much as it expected to from the OWC. Management could demonstrate that it achieved only 10 percent of the projected annual OWC savings of over $805 million.”
History of Failure
Douglas Adie, a professor emeritus of economics at Ohio University, says USPS has a long history of failing to serve consumers well.
“The Postal Service has been undergoing reformation since Benjamin Franklin, the first Postmaster General heading the Post Office in 1775,” Adie said. “The reforms have become more serious and intentional since the Postal Office Department has been reformed into the Postal Service in 1971, but no more successful. Attempted reforms have been failing since the beginning of the organization, and will continue to fail until its basic organization is changed … to a profitmaking company.”
Competition for Consumers
Adie says forcing USPS to face real competition from private-sector companies would create incentives to shape up and improve its services.
“Repealing the private express statutes, the monopoly on first-class mail, might be the most important reform,” Adie said. “It will eliminate the rents which the constituents fight over. The rents occur because of this monopoly. Other companies could step in and supply this document delivery service at lower cost than the USPS.”
Breaking the Losing Streak
Michi Iljazi, a policy manager for the Taxpayers Protection Alliance, says the Postal Service should be pressing for real reforms instead of taking on even more services.
“Unfortunately, the Postal Service has had a trend of losing money over the last several years, due to several factors,” Iljazi said. “The key problem the agency faces is that they lack real leadership to push any meaningful reform. They are also getting away from their core mission of delivering the mail and focusing on things like grocery delivery, and possibly financial services now.”