During his hearing to be appointed to another term on the board of governors of the U.S. Postal Service today, Chairman Mickey Barnett recalled senior management’s meeting with a futurist who predicted that paper would be virtually nonexistent in 30 years. “If that is even possible,” Barnett said, “there must be some forward thinking, and we must focus on package delivery.”
There’s little doubt that the Senate Homeland Security and Governmental Affairs Committee will give Barnett its blessing. The eight-year veteran of the board has the experience to help USPS through difficult times. What’s more, he’s one of only four sitting governors on a board that is supposed to consist of nine. But today’s hearing served to further acknowledge that the Postal Service future vision for itself is as a competitor to FedEx and UPS—and maybe even Peapod and Fresh Express. Barnett shared with committee chairman Tom Carper (D-DE) that early results from a San Francisco grocery delivery test with Amazon Fresh had been encouraging.
“I’ve met with members of the Senate and House in the last two years, and all are in agreement that—even if reforms are made, the Postal Service…must work aggressively to generate additional revenue,” Barnett said. “We are showing steady 8% growth in the package business, and we believe growth will continue and offset some of the losses [in First Class Mail revenue].”
USPS financial results for the nine months ending on June 30 showed an 8.5% rise in shipping and packages to $3 billion. First Class Mail declined 3.4% during the same period to $48.7 billion, and Barnett made mention of the fact that First Class is the Postal Service’s most profitable segment. Not mentioned was the fact that Standard Mail—the primary channel of direct mailers—was the largest revenue contributor at $60.5 billion, despite a 4.3% exigent rate increase in January.
Carper, sponsor of the Senate Postal Reform Act, cited exigency as a necessary component of future reform. “Our bill [holds] that the temporary rate increase become the new baseline, which we think is appropriate considering all the cuts USPS has made,” Carper said. “If we do that and you [Barnett] do your part, we will be in a position to recapitalize the postal service.”
When Carper asked Barnett what he would have Congress do to facilitate the generation of new revenue streams at USPS, Barnett asked for greater ability to operate as a free-market enterprise. “Free us up to do it. Treating us as a utility was a reasonable model for a couple hundred years, but there’s no need to [continue to] regulate us as a monopoly,” Barnett said. “We’re not going to use monopolistic powers to drive competitors out. We think we should focus on the future–which is small package delivery.”
