Trade groups representing major U.S. Postal Service customers agreed this month to lift their opposition to another increase in mailing rates. But as these magazine publishers and direct mailers work with the postal service in this difficult time of security concerns, this price concession should not derail the larger effort to improve postal service inefficiencies.
As one of the largest private-sector customers of the postal service, we know all too well the serious need for sweeping operational reforms for this organization, which is saddled with rules set by Congress more than 30 years ago. We ship billions of catalogs, direct mail, magazines and packages for many of the country’s major publishers and retailers, interacting with the postal service around the clock and seeing all its strengths and limitations.
While we agree with the great need to address postal safety and security in light of the horrible anthrax attacks on our nation, this immediate crisis and its costs should not stall legislative or operational progress toward crucial USPS reform. The mail provides an infrastructure backbone to our economy, but the system needs a major chiropractic adjustment on a number of fronts. Such reform could come early this year in the form of legislation being developed by U.S. Reps. John McHugh, R-NY, and Danny Davis, D-IL. Without reform, escalating postal costs will continue to hinder American business.
As in any good business, the USPS should capitalize on its strengths. Those strengths surround the local collecting, sorting and delivering of mail, ending at the mailbox of every U.S. home and business six days a week. But when it comes to the upstream processing and shipping of mail, the postal service must acknowledge its limitations.
The postal service can achieve enormous cost savings by using the private sector to share the upstream workload of sorting, processing and shipping mail to local post offices and regional distribution centers. The private sector has proven more efficient. When the postal service shares this work with the private sector, the entire economy reaps the benefits. A recent example is the USPS agreement with FedEx, which opens the overnight carrier’s world-class air network to transport mail. The result is reduced cost and improved service.
At the same time, the postal service must more aggressively analyze its operations based on industry benchmarks, looking for the inefficiencies and rooting them out. Rather than focusing on covering rising costs through escalating postal rates, it should do more to engage the best and brightest minds in industry to optimize and secure the remaining postal service infrastructure.
By employing better business strategies to become more efficient, the postal service can greatly limit rate increase requests and the negative effect they have throughout our entire economy.
