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Tue June 26 2018 00:13:02

Would Privatizing the Post Office Help Online Sellers?

By: Ina Steiner

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In April, President Trump created a task force to look at postal reform. The President's Task Force on the United States Postal System will publish its recommendations by August 10, 2018.

Last week, the White House had more to say, opening up the possibility of privatizing the post office. "Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations" covered recommendations for "structural realignment of the Executive Branch," including a restructuring of the USPS, while noting that some of the more significant changes would require legislative action.

The 132-page report is available in PDF format on the WhiteHouse.gov website - skip to page 70 to get to the section titled, "Restructure the Postal Service." 

Here is the summary of the proposal: 

"This proposal would restructure the United States Postal System to return it to a sustainable business model or prepare it for future conversion from a Government agency into a privately-held corporation. Like many European nations, the United States could privatize its postal operator while maintaining strong regulatory oversight to ensure fair competition and reasonable prices for customers. The President's Task Force on the United States Postal System will make recommendations on reforms towards this goal in August 2018."

The USPS issued the following response to the restructuring proposal, available on the USPS website.

The call for postal reform has been ongoing for years - five years ago, the USPS said it was facing an "unprecedented set of financial challenges heightened by the inability of Congress to pass comprehensive postal legislation," which it has still yet to do.

But such a direct call for postal privatization is noteworthy.

What is also new: The President's task force will examine the definition of the universal service obligation in light of what it says are changes in technology, e-commerce, marketing practices, and customer needs.

Redefining universal service would be significant, and would make it easier to reduce and/or privatize the US Postal Service.

How do you think restructuring and privatization might impact USPS service and shipping rates for your ecommerce business?

Update 6/26/18: Government Executive published an article this evening about the the privatization plan's reception by lawmakers.




Comments (47) | Permalink

Readers Comments

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This user has validated their user name. by: Ming the Merciless

Tue Jun 26 01:25:53 2018

Disastruous.

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This user has validated their user name. by: Marie

Tue Jun 26 02:08:16 2018

Congress has such a strangle hold on USPS it is just ridiculous that it has been allowed to go on as long as it has.  Sure USPS has its issues but Congress is largely to blame for them not being able to work through those issues.

Overall USPS does a fantastic job for me and my business.  I would hate to see that change so dramatically as to go private.  I think that would be the end of lots of small businesses on Ebay as we just would not be able to meet the delivery needs of the site.

What we need is for Congress to get busy and pull together what is needed for USPS to function properly.  Stop dragging their feet and get it done.  But that is so easy for me to say, Congress is in such a procrastinating state all the time that is takes them a decade or better to get things done.  

We need to find a way past or around what I see as the road block for MANY important issues called Congress!  There is so much politics involved that it is next to impossible to get stuff done in any timely manner.  So they procrastinate because they can't get the right support for something or they aren't willing to fight for it.  Whatever the reason is, there has got to be an answer as we are all suffering because of the delays.

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by: 1st Armored Div. 1971-1973 This user has validated their user name.

Tue Jun 26 09:15:51 2018

It would be a disaster for the small seller who relies of 1st Class Package to ship their items.

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This user has validated their user name. by: toolguy

Tue Jun 26 10:02:35 2018

I say YES

It would bring an end to those nasty ePackets and bring on a more level playing field for small sellers.

It might also bring down prices on domestic postage. . .

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by: Just Plain Irritated This user has validated their user name.

Tue Jun 26 10:26:25 2018

I'd like to see more than one private company handle what the USPS does.

Competition generally drives up quality of service and drives down prices.

That would be GOOD for small sellers.

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This user has validated their user name. by: iheartjacksparrow

Tue Jun 26 10:27:07 2018

The privatization of the post office would mean postage costs would skyrocket since it would be all about profit for whichever company was in charge.

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by: mcposty This user has validated their user name.

Tue Jun 26 10:55:19 2018

No..privatizing it would kill it.

The only reform it needs is stop shipping china crap free. Make them pay the same rates we do. End of story.

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by: pace306 This user has validated their user name.

Tue Jun 26 11:34:23 2018

Imagine privatizing the PO and getting a Devil Wenig in charge, or worse a Bobby Cupcake???

No thank you - while government oversight is bad - in a case where you get a bad CEO - it would get worse.

The PO is having issues because of 3 main things:

1) Subsidization of Amazon (Sat delivery, below standard rates

2) forced early payments for retirements and other financial outlays. The government makes USPS pay for these things 10 yrs in advance -- it ties up cash flow.

3) subsidization of ePacket crap from China

Im all for privatizing government programs WHEN IT MAKES SENSE - just doing it "to do it" is stupid.

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This user has validated their user name. by: RKTOYS

Tue Jun 26 12:13:24 2018

People don't understand privatization.  They hate the government and that's all they think they need to know.

When you privatize, you add "shareholder profit" and other expenses.  Now your choice is to either raise prices (b-b-but private sector will be c-c-cheaper!) or cut corners (b-b-but private sector will do b-b-better!).  No, really, actually think about this.  In order to free up capital to be leeched out by shareholders, the post office would have to:

1.  Cut jobs.  Longer lines, slower delivery.
2.  Cut equipment.  Slower delivery, unreliable tracking.
3.  Cut buildings.  Less access to postal services.

The last thing America needs is a postal service burdened by overpaid next-quarter obsessed leeches throwing spaghetti at the wall as they grind people actually handling your mail into dust.

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This user has validated their user name. by: Marie

Tue Jun 26 12:41:56 2018

@toolguy

Because it may become a private business, does not mean that e-packets would go away.  At least they may not.  Or did you read somewhere that the government would allow this.  I ask because the article says that "strong regulatory oversight" would be in place.  Hard to say what that would really mean, but it could mean that if privatized they would have to keep the epackets rates?

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by: TomH This user has validated their user name.

Tue Jun 26 13:04:27 2018

e-packets  are part of an International treaty that we are a party to.  The negotiation arm of the US Government in this regard is the State Department.  All part of our membership in the International Mail Union.

As Pace mentioned in his list. Number 2. the pension plan and payment arrangement, forced and directed by Congress is and has been the biggest capital drain on the post office.

Solving the problem lays mainly with Congress. DON'T hold your breath for a early solution -- or any solution.....

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by: hopeforthebest This user has validated their user name.

Tue Jun 26 13:29:56 2018

What we DO know is the other shipping services charge 2 to 3 times what the USPS does for similar service. Privatization is rarely cheaper or more efficient.

What we also know is that the drive to privatization is being promoted mostly by the huge corporate interests that will profit from it.

Strongly regulated? That's a laugh. Look at how EVERYTHING in the US is currently being DE-REGULATED completely to boost corporate profitability.

In a year or two Congress will be screaming the privatized postal service is OVER-REGULATED and insufficiently profitable, and that government is TOO-INVOLVED and needs to get out of the business of dictating the safety and cost of private business.

Then we'll really see prices skyrocket.

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by: Silver Ice King This user has validated their user name.

Tue Jun 26 14:00:08 2018

Even if they privatize it , the USPS is bound by that e-packet contract and they will have to live with it.  They actually negotiated and got better rates than the United Nations Postal Group was going to force them to operate under.  The United Nations still views China on the same level as Gabon as far as their development goes as a nation.  So they are still classified as a nation in need of help, which is why they are taking such advantage of it.  If and when that classification ends, so will all the cheap Chinese junk.

As Pace said, if you privatize it, the company will be all about maximizing profits for the shareholders, not worrying about their customers at all.  Could anybody imagine Wenig and his Disruptive Technology being in charge of USPS??  If you think they have problems now you would be kicking yourself for ever allowing it.

Congress is never going to do anything unless it is going to benefit them financially on a personal level.  That is what Congress has become, a well oiled machine that only cares about trying to get richer so they can hang out with more socially accepted people so they can further advance their careers.  The days of having an elected official in Washington to look out for our views and wishes is long gone.  They only do what they want and what their campaign contributors want regardless of what their constituents want.

The reason that Trump got elected was because the public is sick and tired of politics as usual and tried to send a message to Congress and Washington DC in general.  Unfortunately it seems to be failing because his own party will not work with him because he does not need all the money that they so need and want.  I was shocked to see that Paul Ryan just threw in the towel and quit because he realized that Trump was not going to join the Good ole Boys club and let them keep getting richer while we were thrown under the bus.  Admittedly, Trump has issues also, but at least he does look out for those that voted for him also, at least I believe so.

Please do not encourage them to privatize USPS.

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by: angryllama This user has validated their user name.

Tue Jun 26 14:22:14 2018

NO.  If  FedEx or UPS has ALWAYS been  "free to offer" sub-one-pound-weight-class service.  Have they?  H*LL no, they haven't.  WORSE they charge all of their even remotely REASONABLE Package rates by DISTANCE, WEIGHT, and TA-DA by even DIMENSIONAL WEIGHT. Anybody who complains about USPS Package rates has their HEADS buried in the MUD so deep that only their Curly Little TAIL is still in AIR.
ONE pound USPS cheapest commercial rate for JOE BLOW shipper is over $5 even if only to the FAR side of YOUR OWN TOWN and goes up like a SKYROCKET from there.  Rates from UPS and FedEx to HAWAII are all predicated on AIR SHIPMENT.  Even a one-pound 6x4x2 inch 7-ounce BOX is AIR FREIGHT and To ALASKA it is at least 2 (maybe 3) different higher and HIGHER rate classes.  USPS is just ONE rate class for that entire state AND for MEDIA MAIL and FIRST CLASS PACKAGES, it is the Same $ to NOME, AK as it is for me to ship 15 miles from my suburban  SIDE of Houston to DOWNTOWN Houston.  Down to the PENNY the exact same price to Puerto Rico, Guam, Marianas, Protectorate, USVI  Hawaii, even to the mythical lands of NORTH Dakota and Delaware.
NO, Privatization of USPS service would be an UN-mitigated Disaster.  

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by: angryllama This user has validated their user name.

Tue Jun 26 14:24:31 2018

Quick correction.  At one point in my previous TIRADE my $5 minimum package price was for UPS , not for USPS.  Whoopsie  

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by: DTSM This user has validated their user name.

Tue Jun 26 16:12:19 2018

We don’t need to privatize the post office.

1) remove the mandate that the USPS pre-pay pension obligations. No company does this and no company except maybe apple who has a ton of cash can afford to do this. If this mandate was removed the post office would be profitable.

2) with this obligation removed, post offices should be able to hire and train new employees to work at the counters to shorten wait times.

3) weed out non productive employees. Either re train them of fire them.  

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by: sasikat9 This user has validated their user name.

Tue Jun 26 17:10:13 2018

As long as it takes a week to get a birthday card to the little girl across the street from us there is no hope for improvement for the post office. They should be privatized. There is no reason their has to be a post office every five miles in an area. We have 11 offices within a 8 mile area. That means rent, electric etc for each office. And an over paid postmaster who is usually never there as it is attending meets on the other side of the state. The post office is bloated with seat warmers and untrained clerks that still don't know the difference between a first class flat and a first class package.

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This user has validated their user name. by: The End

Tue Jun 26 17:19:29 2018

Put Josh Silverman in charge so NO ONE will be able to afford to ship. And for extra kick, put it on the stock market so the Post Office goes out of business entirely.
We've caught on, it's only a matter of time 'til karma catches up. Hope I see it in my lifetime.

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This user has validated their user name. by: ebaydeserter

Tue Jun 26 19:11:37 2018

"The post office is bloated with seat warmers and untrained clerks that still don't know the difference between a first class flat and a first class package"

I don't know where your Postal experiences are happening but here in the Reno area there are no such things as "seat warmers".
This area is chronically short staffed at all times due to Las Vegas area sucking up all the potential positions that need to be filled.
The Postal Service is doing all it can to provide the best service; at least here in Northern Nevada, while working under the "do more with less" mentality. It is sickening.
Privatization will only benefit the chosen few as already pointed out.

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This user has validated their user name. by: Marie

Tue Jun 26 19:23:28 2018

@sasikat9

It isn't like that everywhere.  It sure isn't where I live.  The nearest PO to the one that is 10 miles from us is one that is about 15 - 20 miles away.

I use USPS as my primary shipper.  I may have a couple packages a year get fouled up in the process for one reason or another.  So overall the PO does a very good job for me and I for one would hate to see it privatized.  

What we need is for Congress to take the problems of the PO seriously, DO THEIR JOB and fix some of the ridiculous and financially burdensome that they placed on the PO.  They have the power, they just don't have the drive to get the job done.

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