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Wed Dec 5 2018 01:21:41

Trump Task Force Thinks Outside the Mailbox

By: Ina Steiner

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The United States Postal Service has a monopoly on the mailbox, but what if it could monetize it as a means of generating more income? That's one of the "out of the box" ideas published in a report out on Tuesday by President Trump's task force on postal reform.

The report itself was a reminder of how badly reform is needed (not that lawmakers haven't known that for the past decade or so), detailing many of the challenges facing the Postal Service - especially financial woes.

There was no talk of directly privatizing the Postal Service, but there were many revolutionary ideas on how to overhaul the organization.

Of special interest to readers: the report directly addressed small sellers, attempting to reassure them. On page 55, the report states:

"Given the current structure and capacity constraints of the package market, the Task Force recommends continuing a government-supported package delivery service (at least in the short-term) to ensure that small and medium e-commerce vendors can exist alongside large e-commerce vendors."

The report summarizes the task force's recommendations in Appendix A on page 64. We cherry-picked some of the recommendations focusing on changes to pricing and services of interest to small shippers:

- Require price increases, reduce service costs, or exit the business for any mail products that are not deemed an essential service and do not cover their direct costs. (Administrative)

- Price competitive products in a manner that maximizes revenues and generates income that can be used to fund capital expenditures and long-term liabilities. (Administrative)

- Redefine mail classes by creating products defined by the type of sender and the declared purpose of the mail item. (Administrative)

- Provide greater flexibility to determine mail and package delivery frequency. (Legislative)

- Maintain current discretion to determine mode of delivery consistent with a financially sustainable business model. (Administrative) (Currently, delivery of mail occurs door-to door, via curbside mailboxes, or via centralized delivery such as cluster boxes or post office boxes.)

- As a means of generating more income, the mailbox monopoly could be monetized. (Administrative)

- Explore and implement new business lines that generate revenue, and that present no balance sheet risk to the USPS. (Legislative)

- Evaluate areas of USPS operations where the USPS could expand third party relationships in order to provide services in a more cost efficient manner (e.g., mid-stream logistics and processing). (Administrative)

Note that "Legislative" means Congress would have to enact such changes, while "Administrative" indicates the task force believes the Trump administration could mandate the changes. However, when the USPS itself tried to make some significant changes in the past (moving to 5-day delivery, closing postal processing plants), it ran up against opposition from lawmakers.

The report includes many other recommendations, including some doozies, such as taking away collective bargaining rights from postal workers.

A lot of people were looking for signs that the Task Force might single out Amazon, given the President's tweets about the marketplace, and certainly many of the recommendations would have an impact on the retail giant. 

We found this excerpt interesting:

"To be clear, the USPS should not single out individual commercial customers for disparate treatment. Rather, it must better differentiate its strategies for commercial customers that use postal services based on a return on investment, versus customers who use postal services because they have no other delivery options."

The Package Coalition, of which Amazon is a member, issued a statement in response to the President's Task Force recommendations.

"The Package Coalition is concerned that, by raising prices and depriving Americans of affordable delivery services, the Postal Task Force's package delivery recommendations would harm consumers, large and small businesses, and especially rural communities.

"We are particularly concerned with the proposals to limit access or increase prices on package delivery services - directly or indirectly by changing costing rules or forcing USPS to create a separate package business - which would needlessly reduce efficiency and force the Postal Service to raise prices.

"The Postal Service's package business is a bright spot that is growing and profitable. In 2017, postal package delivery services contributed a $7 billion profit to the US Postal Service's overall bottom line - a result of USPS' unparalleled ability to deliver packages to more than 159 million points of delivery, seven days a week.

"We look forward to working with Congress and other policymakers to support and sustain reliable, affordable postal package delivery services for all Americans."

That last paragraph may be an attempt to serve as a reminder that while Congress hasn't acted on postal reform, many members may be loath to allow unpopular changes to go unchecked.

The report focuses a lot on the Postal Service's Universal Service Obligation (USO), which it says is not clearly defined in the United States.

"The generally accepted attributes for defining the USO include specifying the geographic coverage for postal delivery, frequency of delivery, processing standards, mode of delivery, range of required postal products, level of access to post offices, and rules for affordable postal rates."

Among the task force's recommendations regarding the USO: "Clearly define the USO. Provide a targeted definition of minimum, essential postal services, that due to specific social and economic needs have a basis for government protection."

It also advocates creating a new business model for the Postal Service, declaring the current model outdated.

"The Task Force believes that the reformed USPS business model must embody a new public policy goal, recognizing that private products and competitive markets increasingly meet the country's communications and commerce needs. The new policy goal should have the more targeted function of correcting the failures and inefficiencies of these private markets.

"Future postal strategies for products, pricing, competing, and operating should be centered on meeting the needs of mail and package customers who are not reasonably served by commercially available products."

Other recommendations: the task force says no to a postal bank, but yes to supplying services to Federal, State, and local government entities that have substantial scale ("For example, the USPS could expand government services by processing certain licenses, such as those for hunting and fishing.")

Other ideas: "The USPS could also capture additional value from its existing retail offices by converting post offices into contract post offices or by co-locating with or renting space to complementary retail establishments."

To get back to the idea of the USPS monetizing its monopoly on the mailbox, the report states:

"The Task Force recommends that the USPS explore franchising the mailbox as a means of generating revenue. This could be done by retaining the mailbox monopoly and allowing regulated access, for a fee, to certified private companies. These "franchisees" would be granted access to the mailbox for the delivery of mail and small parcels."

We found that especially interesting in light of comments made by a reader who is a letter carrier. Lindentea wrote on the AuctionBytes Blog on Tuesday that postal carriers consistently find parcels inside mailboxes "misdelivered by companies carrying for Amazon." The reader said the USPS has instructed carriers to bring Amazon carrier-delivered items found in mailboxes back to the post office to be charged postage due.

Perhaps there is demand from companies that want to deliver packages inside mailboxes rather than leaving them on front porches.

If you have time, spend some time perusing the report and let us know what you think.

Comments (21) | Leave Comment | Permalink
Readers Comments

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Whatever This user has validated their user name.

Wed Dec 5 01:50:40 2018

Gezz - how much money did the taxpayer spend on that little piece of fluff? Not one little peep abut China shipping but then why would that surprise? Trumps arse kissing of his Chinese counterparts has always been known.  So consider this - the Chinese pay the same postage as everyone else.  Outcome? American sellers who actually contribute to the US taxpayer base and might just start making money again - hence stimulating the US economy. What a concept  Instead their busy trying to figure out how to squeeze more money out of Americans. Typical.

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: Ina

Wed Dec 5 02:01:37 2018

This report was much longer than my analysis. It was focused on postal reform, and did state in part:

"Finally, as international mail and packages play a relatively small role in the overall economic performance of the USPS, representing 3.7 percent of total USPS revenue, this report does not specifically address issues associated with the shipment and receipt of international mail and packages.

"However, the Task Force fully supports the August 23, 2018 Presidential Memorandum that instructed the Secretary of State to seek reforms to the Universal Postal Union (UPU) ,..."

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Whatever This user has validated their user name.

Wed Dec 5 02:09:17 2018

Idiots run the PO - they took away the stamp machines - said they were too costly to maintain - really? not sure about where you live but that only compounded the time spent in line waiting behind that little old lady that just wants to buy 1 stamp. Consider this - those stamp machines didn't get paid by the hour nor did they earn time and a half.  They got no benefits whatsoever - no pension plan - didn't get paid to work on holidays.  Sure someone had to load them but at my post office it was a time saver.  How about all those folks that now have to stand in line just to get a change of address card that the PO refuses to just put out again making the lines longer.  How many customers have you seen just walk out the door with their packages because they simply can't wait 20 - 30 minutes to get to the counter and go across the street to the independent mailbox store? And how about all the junk they spend money on like $8 greeting cards? and shipping supplies at exorbitant prices that so many just steal? Why is the packing tape at the front when you walk in when the counter is at the back? Nobody pays for that stuff - they simply steal it. Same thing with those padded shippers - they just steal those. I see them do it.  Why didn't I say something? Not my job - getting punched in the face isn't part of my job description. My job is getting outta there as fast as I can.

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Whatever This user has validated their user name.

Wed Dec 5 02:11:54 2018

Ina - I did read Your part - well stated - I rarely read anything the government puts out because #1 - these days it's pretty much dribble and lies and the story changes daily.  I glimpsed over their part and focused on your part because it's pretty much the only part that's worth reading..

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: sasikat9 This user has validated their user name.

Wed Dec 5 06:06:02 2018

In a few years the Post Offices greatest problem is going to be AMAZON DELIVERY. They are currently buying land and planes for their system. The post office is going to be the biggest loser and if you think package postage is high now just wait until Amazon gets it going.

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: Rexford

Wed Dec 5 06:51:11 2018

"Why is the packing tape at the front when you walk in when the counter is at the back?"

My guess is because postal workers are tired of folks showing up at the counter with an open box, requesting tape, and holding up everyone in line.  I've been behind these folks in line on many occasions.

As for what they write about above, I have already seen what they did to international shipping. They raised prices so high we quit shipping internationally.
 
They are clearly looking at any means possible to monetize.  I don't expect that this will end well for consumers.  As always, especially with this administration, big business will come out on top while the average consumer subsidizes the cost.

What I do know is that I don't want any contract workers for any Tom, Dick or Harry company having access to my mailbox.  

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: RKTOYS

Wed Dec 5 07:12:01 2018

Sounds like that report is a veritable word salad.

"Finally, as international mail and packages play a relatively small role in the overall economic performance of the USPS, representing 3.7 percent of total USPS revenue, this report does not specifically address issues associated with the shipment and receipt of international mail and packages."

This has a good chance of being the stupidest statement in that report.  Chinese shipping is nearly free!  That's why it only accounts for 3% of your revenue!  Maybe if you, oh I don't know, charged for it?  Are these people born this stupid or do they take classes?

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: UB This user has validated their user name.

Wed Dec 5 07:16:43 2018

First thing is to get some real facts on the Postal Services bottom line. USPS paid off $1.8 Billion in debt in fiscal year 2018, you cant do that if you are having "losses." Debt was at the max for years at $15 Billion and ended year at $13.2 Billion. Cash on hand only dropped $400 million year over year. Stop believing the fake news. Go check out the USPS 10k filing on their website.  

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: UB This user has validated their user name.
Web Site

Wed Dec 5 07:24:05 2018

The amount of Chinese and other foreign small "slug" packages is costing the Postal Service a good deal of money as well as our Country. These foreign cheap packages are hurting small businesses badly including mine. Ebay will do nothing in real terms about the counterfeit cheap items being sold from this Countries as they only care about their bottom line which is crazy as in the end real US business sellers will close shop thus hurting their margins.

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: Ina

Wed Dec 5 09:42:56 2018

The administration is already working on the disparities of international mail.

The recommendations in this report could have enormous ramifications for every reader, in your personal lives and as online sellers relying on USPS services.

For example, lets say this administration (or a future administration) wants to reduce mail delivery to 4 days a week and eliminate door-to-door and curbside delivery in favor of cluster boxes in your neighborhood. What would happen to the mail and packages you send to your customers?

Buyers would probably start purchasing from bigger retailers that could get volume discounts from UPS or FedEx, which would continue to deliver 6 days a week right to buyers' front doors.

On the other hand, if changes aren't made to the USPS, services might eventually be cut out of necessity.

Imagine if lawmakers had had the resolve to tackle postal reform in 2011?

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Whatever This user has validated their user name.

Wed Dec 5 10:06:37 2018

"For example, lets say this administration (or a future administration) wants to reduce mail delivery to 4 days a week and eliminate door-to-door and curbside delivery in favor of cluster boxes in your neighborhood. What would happen to the mail and packages you send to your customers?"

Ina Bless you for even reading that piece of junk for us - I can't for the life of me even know why they bother to put out these things as we all know they just twitting away over there in washington.  As for allowing customers to stand at the counter wrapping their packages is a testimonial to how stupid the clerks are. That behavior simply isn't allowed at my PO. Those customers are told to leave the counter and go wrap their stuff then come back.  They don't make them wait in line again - they have a "coming back" line once they figure out how to present themselves.  Additionally something that has long ago bugged me - the clerks at the counter just don't get it that they are simply cashiers - just like the ones at Safeway and Walmart - it doesn't require a masters to hand out stamps and weigh packages - the computer does that for them. If the PO is restructured I think the "inside" workers are in for a shock. As for the "outside" workers I applaud them - they put up with a lot out there on the street. I wouldn't want that job.
 

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: iheartjacksparrow

Wed Dec 5 11:34:00 2018

@Whatever - I understand why they took out the stamp machines. I spend a lot of time at my post office, and those machines were, almost on a daily basis, not giving the correct change or not spitting out the stamps. There were always techs fixing the machines, and people had to stand in line to get the money they were owed, or the stamps they never got.  

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This user has validated their user name. by: toolguy

Wed Dec 5 12:50:06 2018

Amazon pays $2-$3 for a package that costs me as a small seller $6-$10 to ship

The chinese pay .25-50 cents for a package that costs me $2.66 - $5 to ship

The US Postal service is #1 at eating my profits as a small seller.

And they want to raise rates again?

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Jerad This user has validated their user name.

Wed Dec 5 13:58:05 2018

I have had some of my family that worked for the USPS and I have heard many things, I have also studied it for business. You can't run a business military style and expect to succeed. This is how the USPS is run. Bosses cannot fire anyone. Workers and bosses can file grievances, but nothing ever comes of it. So bad workers and bad bosses have free reign. We all know how inefficiency affects business. And for how many post offices in the US? That's a whole lot of money wasted and lost. To me this is the main problem with the USPS and some other business. I may be wrong. But I might be right.

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This user has validated their user name. by: Rexford

Wed Dec 5 14:46:31 2018

"As for allowing customers to stand at the counter wrapping their packages is a testimonial to how stupid the clerks are."

The ones who allow that are normally just they lazy clerks who are in no hurry to wait on the next customer.  So not stupid, just lazy.

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: Grady This user has validated their user name.

Wed Dec 5 19:52:52 2018

The principle of subsidiarity should be contemplated in depth. As Government grows itself bigger and bigger they become so much more inefficient, then they need to grow some more to catch up. It's like a big snowball rolling down a hill

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

by: angryllama This user has validated their user name.

Thu Dec 6 05:48:19 2018

Who ARE you HATERS who sit around 25/8 Hating on the post office?  Yes, 25/8 means YOU are working OverTime.

NO, domestic postage rates are NOT out of line with the OTHER major package carriers.  (FedEx and UPS)
Not out of line for MORE than 13 oz package and actually SPECTACULARLY inexpensive compared to those two on Sub-13 ounce shipping.
NO, the USPS is NOT out of line in it's Export shipping costs vs. FedEx and UPS, either.
Go to BOTH of those sites and PULL UP just 3 example Plain Vanilla shipping packages to ANY foreign country.  Those three select first 8 ounces shipping weight, Then 2 POUNDS, and finally 4 pounds.  If you (mistakenly) think International First Class PACKAGE service is too SLOW, go ahead and also research and SAVE the Priority International Rate to compare to FedEx / UPS to that same country.
Rates will be comparable and in my own experience Sharply LOWER than the two COMMERCIAL package companies for export. Don't overlook that CUSTOMS' Forms for export using those NON-Postal services are a BEAR and require you to give BINDING answers to questions likely to confuse those who do NOT ship export on a DAILY basis.

Do the same for a DOMESTIC USA shipment from YOU to Hawaii, Alaska and.... whatever city's zip code is still in the Lower 48, but FURTHEST from you for those same three 8 oz, 2 lb., 4 lb. examples.  Hold onto your WALLET when you do so.  The 8-ounce example will be especially telling as those OTHER TWO carriers price ALL of their Export AND Domestic rates in full pounds even if the package weighs only 4 ounces, let alone 8.

Lastly, YES, the Chinese GOVERNMENT is gaming the system and has gotten the international postal authority to treat their MASSIVE INDUSTRIAL BASE as though they were still a country or RURAL BUMPKINS.  The fees for International mail is a NEGOTIATED fee and should be altered to acknowledge that CHINA is now the Industrialized behemoth that ENGLAND was in the 19th century.

NO, even with alterations this will NOT allow small USA sellers to reap massive $$$profits on selling $0.99 USB printer cables and iPhone charges WITH Lightning connector cables.  To think so is PIE IN THE SKY / RAINBOW STEW.  

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This user has validated their user name. by: Ina

Thu Dec 6 12:04:47 2018

@Whatever raised the issue of how much the report cost. Looks like it may have been in the millions.... https://twitter.com/savethepo/status/1070678457770799104 (One line item $1.6 million)

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This user has validated their user name. by: Ina

Thu Dec 6 12:06:01 2018

And this page links to a great analysis of the report. https://www.internationalmailers.net/single-post/2018/12/06/IMAG-Overv
iew-of-Task-Force-Report

Perminate Link for Trump Task Force Thinks Outside the Mailbox   Trump Task Force Thinks Outside the Mailbox

This user has validated their user name. by: Bill

Thu Dec 6 23:38:14 2018

Ina,

As you know 1.6 million is pocket change to the government. LOL

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