Postal
Quick Reference to the U.S. Postal Service
The U.S. Postal Service is an independent federal agency that must deliver mail to all Americans according to a standardized pricing schedule. Despite a legally guaranteed monopoly on non-urgent mail and exclusive rights of access to Americans' mailboxes, USPS has struggled financially since the mid-2000s. Postal Service activities are predominantly financed through revenue from the sale of mail and postal services. Proceeds from borrowing, interest from investments, and limited appropriations from Congress for specific functions also provide additional revenue. In the first quarter of 2016, USPS posted its first operating profit in five years. But the agency's accounting practices are notoriously opaque to the public, obsfucating persistent financial and operational concerns that would be considered highly problematic in other sectors. The quarterly profit is widely viewed as an anomalous product of an accounting change to workers' compensation expenses tied to interest rates and a temporary "exigent" increase in rates provided by Congress as short-term fiscal relief. Federal legislation passed in 2006 imposes a price cap tied to the Consumer Price Index for all classes of mail within the postal monopoly (but not for competitive products).
Postal Service “Profits” are Nothing to Write Home About
The Postal Service is behaving almost exactly as one would expect a government monopoly competing with the private sector to behave. The postal economics of the past, where the first-class mail cash cow can erase losses incurred delivering other types of mail, no longer apply. The Postal Service's present costs and future liabilities aren't going away. The agency needs to measure them honestly and transparently.
International Postal Update — April 2016
Postal Operators Worldwide Seek Competitive Edge from Technology Investments -- The U.S. Postal Service is investing heavily in major technology initiatives with a focus on improving delivery of its competitive package products. Over the past two years, it has replaced older Intelligent Mail Devices with more than 260,000 new handheld Mobile Delivery Devices (MDDs). The MDDs are single-device scanners with GPS capabilities that allow letter carriers to track package delivery in real time. Clerks scan packages when received, and letter carriers do the same when they are delivered to notify customers within minutes. Phase 1 of the rollout put more than 75,000 MDDs in the hands of letter carriers and cost $149 million between September and December 2014. Phase 2 distributed another 188,000 MDDs at a cost of $349 million through September 2015. A July 2015 audit report by the Postal Service’s Inspector General cited “common functionality issues” in need of improvement.
A Threat to Public Safety, and the Economy, via International Mail
The Postal Service is unwittingly delivering increasing amounts of dangerous synthetic drugs — nasty compounds that can trigger unpredictable, violent behavior and overdoses but dodge anti-drug laws with constantly changing chemical structures. Foreign postal operators are handing drug-laden packages off to USPS at the border for delivery. And U.S. Customs and Border Protection is doing little to stop them. That has to change. The system that fails to screen packages from foreign postal services when they enter the United States threatens public safety and the economy. Police departments in a growing number of communities are struggling to meet the challenges posed by dangerous new synthetic drugs, which are often sold at corner markets in shiny packets labeled with names like Bizarro, Trainwreck and K2. Synthetic cannabinoids are now the second-most abused drug by American teenagers, trailing only conventional marijuana.
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