US Postmaster General hits out at “myopia” blocking postal reform
US Postmaster General Patrick Donahoe hit out at “narrow interests” that have blocked much-needed postal reform legislation in the past four years.
Donahoe, who is retiring as Postmaster General next month, was speaking yesterday at the National Press Club in Washington DC to denounce those who have helped lock the Postal Service in its financial crisis.
Despite Congress failing to pass any meaningful postal reform legislation since USPS slid into billions of dollars of debt, Donahoe said “myopia… shortsightedness” across the mail industry was also holding up the Postal Service.
He said both the labour unions and the mailing industry have failed to suppose USPS proposals for reform in order to “preserve the status quo”.
“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. I’ve always found this very odd, because the ongoing lack of reform creates more pressure to raise prices – which is what happened this past year,” said the 73rd US Postmaster General.
“Our labor unions view the future of the organization mostly through the lens of preserving jobs and benefits as they currently exist. Technology is driving dramatic changes in delivery services – just look at how Amazon is offering one-hour delivery in New York City. The Postal Service needs the flexibility to be a part of those changes – and more importantly, to shape those changes.”
Donahoe attacked the American Postal Workers Union for disrupting the USPS partnership with retail chain Staples to prevent the outsourcing of postal counter services which, he said, would “make it easier and more convenient for people to do business with us”.
“It’s an example of the narrow, near-sighted view winning over the broader, long-term strategy. Unfortunately, it’s now tougher for us to find retail partners,” he said.
Longer-term view
Donahoe, who has been Postmaster General since 2010 will be succeeded by his chief operating officer Megan Brennan next month. Yesterday he called on Congress and industry stakeholders to take a longer-term view on how the Postal Service needs to develop.
He said First Class Mail volumes were “not coming back”, having dropped by 35% in the last decade to cut postal revenue by $17bn a year.
Instead, he said e-commerce was the big driver for services, along with the integration of mail with digital technologies.
The Postmaster General said USPS needs a streamlined governance and the flexibility to adapt more effectively to changes in the postal market.
Donahoe also laid out the need for important healthcare funding reform, describing its Congressional requirement to pay 40 years of future healthcare liabilities within a 10-year period as “absurd”.
He said a system that requires USPS to hand $96bn over to the US Treasury, of which $48bn has been paid and $22bn defaulted on, could be replaced by a system that would require only a final $3bn payment.
“Rather than overspend on healthcare, we could be spending those funds on a new vehicle fleet, package sortation equipment, pay down debt, and significantly slow postage price increases,” he insisted.
With continuing inaction from Congress, the US Postal Service is this week due to begin the process of closing 82 more mail processing plants to try to improve profitability.
Donahoe said the 305 mail processing facilities that have already been consolidated since 2006, along with 23,000 delivery routes and 212,000 jobs, have helped cut operating costs by $16bn a year.
“If we hadn’t pressed so hard and moved as quickly as we did, especially on the cost side of the equation, I have no doubt we would have run off the financial cliff by now. Had we done nothing, Congress would likely be bailing us out to the tune of billions of dollars annually,” Donahoe said.
