The Wall Street Journal reports this morning that the National Association of Letter Carriers is scheduled to release a report today making recommendations about how to save the US Postal Service and describing steps suggested by the USPS as being too timid and misdirected to succeed.
The union position seems to be that closing post offices, laying off workers and reducing delivery days will only succeed in eliminating the USPS’s biggest competitive advantage - it visits virtually every home in the US every day. According to the union, the USPS should actually raise stamp prices, described as among the lowest in the world, and also should “replace its multilayered governance system with a corporate- style board of directors whose members have entrepreneurial experience.”
The postal carriers union “also indicated it would be willing to ask its nearly 300,000 members for more ‘tough sacrifices’ to get the Postal Service out of the red. It didn't specify what concessions it would seek from members,” the Journal writes.
The story notes that “the proposals are the opening salvo in what is expected to be a long series of negotiations as pressure mounts on Congress to approve legislation to restructure the Postal Service, which has said it is in danger of becoming insolvent without changes to its business model.
“The union's plan is one of several competing proposals - including the Postal Service's and bills in Congress - that are promoting rescue ideas, and it illustrates the deepening divide over how to remake the 236-year-old institution for modern times ... The Postal Service is facing historic losses - more than $5 billion in its most recent fiscal year - that it attributes to a shift in communication habits in the digital age and to an unusual requirement imposed by Congress in 2006 that it fund retiree benefits decades ahead.”
The union position seems to be that closing post offices, laying off workers and reducing delivery days will only succeed in eliminating the USPS’s biggest competitive advantage - it visits virtually every home in the US every day. According to the union, the USPS should actually raise stamp prices, described as among the lowest in the world, and also should “replace its multilayered governance system with a corporate- style board of directors whose members have entrepreneurial experience.”
The postal carriers union “also indicated it would be willing to ask its nearly 300,000 members for more ‘tough sacrifices’ to get the Postal Service out of the red. It didn't specify what concessions it would seek from members,” the Journal writes.
The story notes that “the proposals are the opening salvo in what is expected to be a long series of negotiations as pressure mounts on Congress to approve legislation to restructure the Postal Service, which has said it is in danger of becoming insolvent without changes to its business model.
“The union's plan is one of several competing proposals - including the Postal Service's and bills in Congress - that are promoting rescue ideas, and it illustrates the deepening divide over how to remake the 236-year-old institution for modern times ... The Postal Service is facing historic losses - more than $5 billion in its most recent fiscal year - that it attributes to a shift in communication habits in the digital age and to an unusual requirement imposed by Congress in 2006 that it fund retiree benefits decades ahead.”
- KC's View:
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With some justification, there are plenty of people who will cast a jaundiced eye on the union recommendations because it is a union making the recommendations. And there’s some good reason for that; the suggestions might have more credibility if there were greater specificity to the “tough sacrifices” it promises to make.
That said, there is a certain logic to the argument that you don’t make yourself more relevant by making cuts that reduce your biggest competitive advantage.
What the USPS needs to do is rethink its business model within the context of a changing communications marketplace and economic realities. Maybe what they need to do is make a pilgrimage to Seattle, sit down with Jeff Bezos, and say, “How can we work out a deal to become Amazon’s exclusive shipper on every product it sends?” That would certainly have some impact on its bottom line.
And if that doesn’t work, then they ought to trek to Bentonville and make the same pitch to Walmart.
The USPS needs to be thinking in unorthodox ways. The union recommendations should not be dismissed out of hand.
