President Trump is once again exploring the possibility of privatizing the mail service. The United States Postal Service continually operates at a loss. The agency was designed to operate as an independent business, and it does not receive tax money. Leaders point out that it is incredibly expensive to deliver mail to use more than 230,000 trucks to deliver mail to more than 157 million address and post office boxes.
USPS Faces Problems
The United States Postal Service, however, is plagued with problems beyond needing to deliver mail in remote areas where even Amazon and FedEx will not go. Each of the 31,000 post offices has their own operating expenses. If you want to cause problems in a small town, then threaten to shut down their post office. The government also contracts with more than 4,000 mail-shops across the United States and in Puerto Rico.
Employment costs are used for the USPS. They hire more than 500,000 employees. Many are members of the National Labor Relations Board. This board has effectively stopped businesses, like Staples, from selling postage and other mail services to its customers. The USPS also pays health benefits and retirement funds to more than 600,000 people.
USPS Usage Down
The agency must pay these expenses even though volume is down over 30 percent. It peaked in 2006 at 213 billion pieces. Now, people send fewer than 147 billion letters and packages through the mail each year.
Until recently, the USPS claimed that delivering parcels was the most profitable part of their business plan. That may soon not be the case as more companies start coming up with unique ways to get merchandise to customers. Some are experimenting with drones while others are using Uber drivers. Amazon is even experimenting with self-drive trucks.
The Retirement Fund Problem
Many people point to the 2006 law that required the USPS to pre-fund retirement for the next 75 years. Many people who many who would draw that retirement may not even be born yet. Postal authorities say that it is like telling someone that they will charge a million dollars on their credit cards over their lifetime, so they need all that money upfront.
Privatizing Mail Delivery
President Trump believes that privatizing the USPS may be the answer. Since the Great Depression, it has been against the law for anyone other than your mail carrier and people living in your home to touch your mail. While the original plan was to stop people from stealing your money sent to family members far away, the law still says that no one can put anything in your mailbox except a postal worker. Until this law is changed, Amazon and FedEx say that they will not enter into serious negotiations to privatize the mail.