Roff: Don't wreck the Postal Service. Reform it

The idea that Donald Trump is going to shut the post office down is another one of those internet rumors generated by the ignorant to raise the hackles of the ill-informed.

It does, however, point to an essential truth: the United States Postal Service is poorly managed, in a state of almost perpetually near-bankruptcy, and desperately in need of reform. What Trump is alleged to be thinking probably won’t pass muster in the federal courts. Congress created the current organizational structure of the Postal Service and would have to approve any changes on the scale the president is said to be contemplating. He can’t do what he is said to want through an executive order.

There are ways to make the Postal Service operate on a basis close to or at profitability and reduce the debt to an operationally manageable level that Congress need not approve first. Unfortunately, current Postmaster General Louis DeJoy has resisted most of them. Instead, he’s opted under his misnamed Delivering for America plan to add full-time permanent unionized staff and build huge new facilities to bring in-house much of the work the Postal Service’s private sector partners were doing well and more cheaply.

That’s not the way to reduce the volume of red ink produced each year. What needs to happen and is in sync with what Trump is attempting to do in other parts of the government is the rightsizing of its workforce and a redirection toward doing well those things only it can do.

One of these critical functions is the delivery service to the space known as “the last mile.” Until Congress decides to change the law requiring daily home delivery to just about every household in America, complete privatization will be off the table. It will be costly, with much of the burden falling on the people in the red states who constitute Trump’s political base.

Currently, daily local delivery inside highly populated blue cities and purple suburbs is relatively inexpensive. The cost of that level of service in sparsely populated red states and Republican-leaning rural areas is, for reasons that should be obvious, much higher. Why would Trump pursue a change in policy that punished the people who voted for him to the benefit of the blue political machines that oppose him with such force?

Aside from casting off what remains of DeJoy’s failing plan, whatever is done must satisfy the requirements of the Postal Service’s current universal service obligation. That means the delivery of first-class mail, magazines, and packages to everyone virtually everywhere, six days per week, in the rain, the snow, and the gloom of night continues, uninterrupted and affordably.

To get there, the next postmaster general must outsource as much of the agency’s work as practical to its private sector partners. Outsourcing could produce cost savings of as much as $12 billion. Another $15 billion could be banked if the work to complete DeJoy’s network of upstream mega-processing centers is blocked. There’s plenty of cause to do so. The ones already online have consistently failed to meet performance expectations.

Nothing less than the United States Postal Regulatory Commission – the entity that determines how much it costs to mail a letter – reports the Postal Service’s performance to be in continual decline, year over year. Efforts at real reform must center on outsourcing all the things the private sector does better and cheaper so the Postal Service can earn its way out of the hole it’s dug for itself rather than having the taxpayers bail it out.

Call it partial privatization, a public-private partnership, or whatever you like, assigning the presorting, transportation of mail and packages, equipment maintenance, IT payment solutions, and cash management functions to companies in the private sector has proven to be more efficient and less expensive than what the Postal Service can do on its own.

Leave the Postal Service to focus on the last mile. That’s its core competency, which, as all the business schools teach today, is what executives who want to be successful should focus on.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations.