- - Friday, November 7, 2014

ANALYSIS/OPINION:

The postman, who no longer rings twice, needs help. He’s struggling for relevance in a digital age, and the commission that directs the Postal Service isn’t delivering needed reform. President Obama could address this by choosing a new chairman of the Postal Regulatory Commission next week when the current chairman’s term expires.

The public’s frustration grows every time an important letter is lost, when packages are late and surly clerks guarantee long lines at the post office. The American Customer Satisfaction Index reveals that the USPS just suffered its worst year-over-year decline in customer satisfaction in 20 years. Mismanagement abounds. The Postal Service has lost $26 billion over the past three years, and it owes $100 billion in unfunded liabilities. The USPS defaulted on payments to the Treasury Department for the fourth straight time, this time by more than $5.5 billion.

An enormous operation that employs 600,000 and maintains a $71 billion budget can’t change its profligate ways overnight, but some of the schemes under consideration to “cross-subsidize” letter delivery are troubling.

In September, the Postal Service asked the Postal Regulatory Commission for permission to expand an exclusive arrangement between the USPS and Amazon to deliver groceries. A “customized delivery” pilot project is delivering groceries now in the San Francisco metropolitan area, and the commission has authorized a nationwide expansion of the scheme to put groceries on doorsteps before 7 in the morning.

That sounds good, but maybe it’s not. Amazon is taking advantage of several forms of government subsidy not available to competitors that have been trying to offer same-day grocery delivery.

The Postal Service, for example, doesn’t pay the 18.4 cents per gallon federal fuel tax. That doesn’t sound like a great advantage, but postal cars and trucks drive 1.3 billion miles per year, and the exemption saves more than $26 million. Shipping costs are subsidized, too. The USPS debt is covered by the taxpayers.

Since this is an “exclusive” arrangement, private competitors are cut out. Such arrangements “work to hurt private businesses who cannot afford to bring their price down to a level where they can be competitive,” David Williams, president of the Taxpayers Protection Alliance, observes in a filing to the Postal Regulatory Commission.

Grocery delivery is a distraction from the fundamental mission of the Postal Service, which is to deliver letters at a reasonable rate to anyone anywhere in the United States. The postal service must look for new leadership. Ruth Y. Goldway has been the chief postal commissioner since the beginning of the Obama administration, and her time is up.

Sen. Tom Coburn, the retiring Republican senator from Oklahoma, has been troubled by Mrs. Goldway’s use of her position to accumulate frequent-flier miles. She went on 34 trips in her first four years on the job. Why should a postal regulator be flying down to Rio de Janeiro on the taxpayer dime?

The Postal Service must focus on cutting costs and improving leadership if it hopes to step back from the brink. Choosing a new chairman of the Postal Regulatory Commission would be a good place to start.


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