The Lexington Institute urges the Postal Regulatory Commission (PRC) to adopt changes in analytical principles (i.e., costing methodologies or cost models) and related regulations pertaining to cost attribution at the U.S. Postal Service (USPS).
The requirement for this to be evaluated via section 203 of the Postal Service Reform Act of 2022 (PRSA) is timely and important for numerous reasons, including the following.
- In-depth reports from the USPS’s Office of Inspector General (USPS OIG) have documented the substantial financial benefits that would accrue from these actions, and inherent problems and shortfalls with the current approach.
- USPS has undertaken a $40 billion, 10-year capital investment program which is fundamentally altering its network and is oriented toward growing its package business. Meanwhile, mail volume is dropping at alarming rates and how these costs are attributed will have a material impact on that industry’s future, including whether it will survive.
- There are also once again reasons to be concerned with USPS’s financial solvency and whether its Delivering for America plan will work. USPS’s need for high-quality cost attribution data has never been more important.
- The growth of artificial intelligence presents numerous opportunities for USPS, including facilitating improved cost attribution. As USPS is in the process of modernizing its information technology, it should adopt systems that better facilitate cost attribution.
To read the full comments filed with the Postal Regulatory Commission, please click here.
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