President’s Commission on the U.S. Postal Service
To what degree is the Postal Service’s business model the source of the Service’s present financial problems, as compared to the failure of postal management to manage effectively within the constructs of that model? The dramatic downturn of the Postal Service’s fiscal performance in recent years can be traced in large part to two factors: (1) a failure to consistently budget for and capture savings made possible by large capital investments, and (2) a fundamental misunderstanding of postal economics by postal management in relying on economies of scale which do not exist in the provision of postal services.
The Postal Service’s execution of its business model, as dictated by the Postal Reorganization Act, has emphasized mail volume growth as its basic strategy. This strategy, coupled with an ongoing failure to create significant increases in productivity, stands in the way of any efforts to improve the Service’s financial condition. This analysis includes eight specific policy recommendations for the Presidential Commission on the U.S. Postal Service to consider.
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