Ever since Postmaster General (PMG) Louis DeJoy rolled out a 10-year reform blueprint for the United States Postal Service (USPS) on March 23, the agency head has had a tough time “selling” the plan. Shortly after the plan’s release, House Democrats unveiled the Delivering Envelopes Judiciously On-time Year-round Act (DEJOY) Act in an attempt to preempt the USPS’ reform agenda. And, again, calls have intensified for PMG DeJoy’s ouster, though it’s unlikely that he is going anywhere anytime soon. Rather than attempt to score political points by demonizing the USPS executive, members of Congress and the Biden administration should work with DeJoy to ensure that the agency gets back into the black.
It has been a tough time for America’s mail carrier. DeJoy estimates that, absent significant reforms, the USPS will run out of money by late 2022. While these forecasts aren’t as dire as the prior doomsday predictions used by the agency to secure a bailout, the financial numbers speak to the need for reform. Fortunately, the USPS offers some sensible suggestions in its blueprint to get a grip on out-of-control costs. Various ideas include optimizing local truck routes, embracing performance-based highway contracting, diversifying the current mix of air carriers, and having a unified logistics program to ensure that the entire postal system is operating harmoniously. This series of changes is long overdue because inefficiencies and suboptimal transportation strategies have plagued the USPS for many years. All told, a comprehensive cost-cutting strategy could save the agency more than $3 billion per year.
Unfortunately, not all the ideas outlined in the blueprint would reduce costs and improve operations. When the USPS recently announced its estimated $6 billion agreement with Oshkosh Defense to produce up to 165,000 new mail trucks over the next 10 years, it appeared that the prospect of a costly, all-electric fleet was off the table.
But, according to the recently released blueprint, the USPS “can commit to a majority of the Postal Service’s delivery fleet being electric within 10 years and a fully electric fleet by 2035 … with the right level of congressional support.” While the Oshkosh vehicles are primarily gas-powered, they are capable of being retrofitted with electric systems in the future. Unfortunately, the USPS appears intent on making the mistake of mass-retrofitting a reality – on the taxpayers’ dime.
According to DeJoy, the USPS would need to spend up to $4 billion extra to fully electrify its fleet. Even if Congress agrees to entirely fund the bill for this cost on paper, the USPS would likely expend additional resources due to large, inevitable cost overruns associated with federal projects. All of this extra spending and effort would likely have a negligible impact on greenhouse gas emissions. Even if a cleaner fleet could reduce emissions by 1 million metric tons of carbon dioxide each year (in itself unlikely), that would only amount to just a fraction of a percent of total U.S. annual emissions. While new mail truck investments are certainly worthwhile, the USPS should forgo 100% immediate electrification.
Another problem with the 10-year plan is that the USPS’ reform plan fails to lay out a coherent set of service standards. The blueprint notes, “Current service standards require three-day delivery for any destination within the continental United States, whether the distance from origin is 300 miles or 3,000 miles.” As the agency points out, the USPS has failed to meet its first-class mail service standards since fiscal year (FY) 2012 and performance has been on the decline since FY 2017. There has been a particularly pronounced dropoff since the start of the coronavirus pandemic.
The agency uses these metrics to argue that current standards are unattainable and makes the case for changing the current one- to three-day service standard to a one- to five-day service standard. While this may reduce some expenses over the short term, the change would significantly erode the reputation and credibility of America’s mail carrier over the long-term.
Pre-pandemic, roughly 90% of first-class mail was meeting service standards (figure 7 in the blueprint). This performance will likely resume post-pandemic as thousands of USPS workers emerge from quarantine and are vaccinated. Instead of ditching the service standard status-quo, the agency should seriously consider ending six-day deliveries and seven-day package deliveries which entail significant overtime expenses. Allowing USPS workers to take a “breather” on weekends would save the agency at least $2 billion per year, while allowing Americans the option of speedy deliveries on weekdays.
America’s mail carrier has its work cut out for it and needs to significantly rethink some of the ideas in its reform blueprint. But, then 10-year plan offers a useful starting point for direly needed changes. Policymakers must come together to improve on the plan and forge a workable plan for the USPS.
Ross Marchand is a senior fellow for the Taxpayers Protection Alliance.