COMMENTARY: Postal service is a hungry dinosaur awaiting the meteorite

The U.S. Postal Service seems to be caught between generations, always a step behind and always seeking short-term solutions (i.e., rate increases). Now Postal Regulatory Commission Chairman Robert Taub is proposing to allow the Service to continually raise rates well beyond the rate of inflation. Again and again, it seems.

For years, the USPS has been complaining that email is “eating into its market share.” In addition to first-class postage, Mr. Taub stressed the need for parcel delivery price increases to “help keep it competitive with rival shipping companies…” according to the recent Associated Press report. Found this interesting; I thought Republicans stressed privatization whenever possible.

The last time I received or mailed a real honest-to-goodness letter was in the 1970s, so first-class rate increases wouldn’t bother me much. But we still send some cards on special occasions, and besides, it’s the principle of the thing.

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I originally thought that the obvious solutions would be to (1) raise the rates on that junk mail that is most of the volume and takes most of the time to stuff into mailboxes, and (2) deliver mail every other day, with Monday-Wednesday-Friday and Tuesday-Thursday-Saturday routes.

Started wondering what’s really going on, especially in this email age. But before blindly criticizing decided to do a bit of research … and, like most things found it to be more complicated than I thought.

The complexity is almost comical, but it’s a tragedy disguised as a comedy. IMHO, there’s enough smoke to suggest a large fire of mismanagement, incestuous lobbying, burdensome regulations, overly powerful unions and antiquated thinking, with no incentive to change.

The “junk mail” issue: Apparently junk mail is very important to the Postal Service, although according to a spokesman, “We don’t use the ‘J’ word.” Standard mail or advertising mail is increasing while “stamped mail” is declining. It looks like “junk mail” accounts for about 60 percent of almost 200 billion “pieces” handled each year.

Although junk mail is predominant, it takes two pieces of it to realize the cost of a single piece of first-class. So why not raise the junk rate? Advertisers scream. They even have the audacity to feel, as one put it, for the “countless charities that rely on the mail to fulfill their missions.” But despite advertisers’ complaints, hard copy mail remains economical and effective. It must be handled by the recipient, a decision made, and then discarded.

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What is the rate anyway? Apparently 14.2 cents and up; there are many categories of junk mail and even a 103-page manual on it.: Carrier routes vs. automation, saturation vs. basic, “AADC vs. mixed AADC,” three-digit vs. five-digit, non-profits … In fact, its very complexity built up over 200 years is one reason preventing its overhaul.

Don’t expect much to change. Bureaucratic dinosaurs are not easily slain, and powerful forces with lots of lobbying and election campaign dollars are at work.

So whether Mr. Taub’s short-term proposals go into effect or not, the longer-term prospects are bleak. There are bills in Congress to address it, but “prospects remain uncertain.”

Until then we will continue feeding the dinosaur.

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David Shumway is one of our regular contributors.

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