Americans expect those sent to Washington to fix problems before they fester. That’s not happening with the U.S. Postal Service, which is on the verge of a financial collapse. In addition to disrupting mail and package delivery, this threatens public safety.
On December 4 a presidential task force report warned of the need for major reforms to make the Postal Service financially viable and protect taxpayers. Two congressional hearings have since been held, but meaningful legislation languishes.
The Treasury Department has been propping up the Postal Service for years with low-interest loans, enabling it to avoid bankruptcy and re-organization. The losses and debt are staggering and there are no signs of a turnaround.
The task force report noted the Postal Service had a negative net worth of $62 billion. Total unfunded liabilities and debt exceed $140 billion. The Postal Service has had 12 consecutive years of losses, and is expected to lose $6.6 billion this year.
Here are five ways a financially strained Postal Service threatens public safety.
—Increase in opioid use. Starting January 1, Congress required all incoming mail from China to have advanced electronic data (AED). As nearly all opioids are made in China, this enables law enforcement to better pinpoint and seize suspicious packages. Yet, the Postal Service has not even done the basics and continues to deliver the 24 percent of packages from China without AED. While the Postal Service should immediately get aggressive with China and refuse to deliver these items, it should also put all available resources possible into helping intercept opioids, which in 2017 killed 47,000 Americans.
—Aging trucks. Would you allow your teenager to drive a vehicle that is more than 20 years old and has been driven on average six days a week? According to the Postal Service, 62 percent of its trucks are more than 20 years old.
Among the many issues of maintaining older vehicles is preventing potential fires. Trucks.com reports that 120 postal truck fires have occurred in the last five years. This is based on news and social media reports, so the actual number is likely higher. The Postal Service announced it intends to buy new trucks through large capital investments in the coming years. But it also acknowledges it will not be able to do so if their financial problems persist.
—Drug and medical device delivery. Pharmaceuticals and medical devices are increasingly delivered to homes. These are especially important to the elderly, sick and poor. Postal Service liquidity problems would curtail or delay these deliveries. The recipients and shippers should have contingency delivery plans.
—Recall notices. Product safety recall notices are timely and essential for protecting consumers. Without prompt Postal Service delivery, risks rise.
—Counterfeit products. Counterfeit goods are an increasing problem and threaten the viability of legitimate businesses. Some products, like counterfeit toys, pose safety risks to children and others and cannot be recalled. A financially stronger Postal Service will be better able to identify and seize counterfeit items.
For Postal Reform, Congress’s maxim should be to first do no harm.
This includes keeping the Postal Service away from new and potentially high-risk services, including postal banking or any business that requires capital expenditures.
The good news is that first-class mail still accounts for 35 percent of revenues and is its most profitable product. The Postal Service should focus on retaining and cultivating this business, through innovations like its Informed Delivery service, which lets customers know what mail is coming.
It is on the packages side of its business where the Postal Service has had a much harder time financially. The task force report is clear that the Postal Service should “price these competitive products to generate income rather than maximize volume.”
In addition, the task force urges that the Postal Service revamp its cost allocations, to better reflect the institutional costs for packages so that business planning and pricing decisions can be made accordingly. It also urges the Postal Service to provide “full price transparency for all package services in order to reduce market distortion.”
By taking these and other steps soon, America can be assured of having a safe and efficient Postal Service.