In Farewell Address, Donahoe Holds Out Hope for Postal Reform in 2015

 

In a farewell address delivered at the National Press Club in Washington, DC, today, outgoing Postmaster General Patrick Donahoe thanked his Uncle Bob for getting him out of bed to take the postal exam 40 years ago, said shortsightedness of special interests was USPS’s biggest problem, and held out hope that a new Congress might pass postal reform legislation this year.

“We’ve got some good support [in the new Congress],” Donahoe told a room crowded with members of the national press. “Jason Chaffetz and Elijah Cummings in the House Committee and Senator Ron Johnson have all spent a lot of time in [postal] committees. Both sides realize it’s critical going forward to have a strong postal service. Both the House and the Senate are looking for some wins, so there’s a good chance for a good bill coming out here.”

Aside from “absurd” retiree benefits prepayments, shortsightedness on the part of postal unions and big mailers is the biggest obstacle the Postal Service confronts in moving forward, Donahoe argued.

“The mailing industry views the future of the Postal Service mostly through the lens of pricing, so they don’t want the Postal Service to have greater product and pricing flexibility,” he said. “I’ve always found this odd, because the ongoing lack of reform creates more pressure to raise prices, which is what happened this past year.”

Asked what he would do to counter lower volumes triggered by price increases, Donahoe said he foresees the possibility of a performance-based pricing system akin to the pay-for-click model of the Internet.  

“We can measure with the Intelligent Mail barcode not only what day a person got a catalog, but when they got it within an hour,” he said. “You can actually see from the address who bought something in response to a mail piece, so we should be looking at at a pricing scheme that’s performance-based.”

If he could leave postal stakeholders with one message, Donahoe said it would be to grant USPS greater flexibility to deal with major structural issues. “We used every bit of flexibility we had,” he said. “If given [more] flexibility,  I have no doubt the Postal Service will continue to aggressively adapt to a changing world and a changing marketplace.”

Donahoe will retire at the end of the month, turning the PMG’s office over to its first female inhabitant, current COO Megan Brennan.

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