The Postal Service death spiral continues. Delivery time is slowing, service is worsening, and postal rates keep going up. The WSJ reports that the USPS is planning cuts to more than 260 mail processing centers nationwide, which will eventually result in the loss of roughly 35,000 jobs. Oh, and it will need to charge five cents more to mail a letter. (When I was a kid, it costs three cents to mail a first class letter, and same city delivery was often faster than it is today.)
This is what failure looks like: getting less and less done while sucking in more and more money. Yet Congress can’t help itself; led by Bernie Sanders it is trying to make a bad situation still worse:
Sen. Bernie Sanders (I., Vt.), who is pushing for legislative changes that would stop or delay mass closings of mail-processing centers, described the proposed closings as counterproductive. He and 26 other senators recently signed a letter to congressional sponsors of postal legislation seeking to prevent cuts to first-class-mail delivery.
Irrational, hang the cost mandates by legislators desperate to please rural constituents and labor unions make it harder to do what must be done. Overhaul of the USPS is being delayed, but it can’t be avoided. Internal estimates predict the postal service will be hemorrhaging $18.2 billion a year by 2015. Efficient private carriers and technology like email and Skype have undermined certain USPS services faster than the aging behemoth has been able to adapt (something we’ve covered before).
The postal service is an example of where the blue model goes when it has jumped the shark. Old technology, expensive and unproductive labor, crushing pension and health care burdens for retirees plus insane congressional mandates that make sound management impossible: not even a monopoly on mail delivery can rescue an organization weighed down with these burdens.
Congress should spend more time passing laws to protect the public against the depraved greed of insider trading legislators and worry less about micromanaging institutions it doesn’t understand and can’t run.
And the country should be thinking about how we sell off the USPS to private investors while there is still something to sell.