OPINION:
The U.S. Postal Service has undergone a long-overdue change in leadership, but in passing the baton, outgoing Postmaster General Louis DeJoy also handed off an epic mess to his successor, David Steiner.
Service is off and the price of stamps and shipping is up, but after decades of bad management, that’s almost a given. The key issue is that, in trying to turn the postal system into a company he knew how to run, Mr. DeJoy added to the bloat rather than trimming the fat.
Mr. Steiner has a chance to make his mark quickly. The service’s year-end financials are now public, and there’s not a bit of good news to be found. Mr. DeJoy’s insourcing campaign has proved quite costly. The addition of nearly 200,000 career employees has brought the total personnel count to a level not seen in 20 years, when the volume of mail was more than double what it is now.
With more people delivering less mail, USPS experienced a $9 billion net income loss. That’s still in line with the losses experienced thanks to the DeJoy plan, but it doesn’t lead to long-term fiscal stability. Mr. Steiner really has only one choice, and that’s to follow the lead set by President Trump in his Oct.15 executive order to ensure “continued accountability in federal hiring” by putting a freeze on new hires now, before the holiday season is upon us in earnest.
As they say, to get out of a hole, you first must stop digging. The one Mr. DeJoy left behind is vast and deep. Mr. Steiner has more than enough postal workers available to do the job, even with the modest reduction over the past year. Remember, 80% of the Postal Service’s costs involve labor. Making do with less while doing more is a core component of retrenchment in any private business. It’s a model USPS should follow.
Under Mr. DeJoy, USPS invested billions of dollars it didn’t have to build out middle-mile processing and transportation capacity while other logistics companies — UPS, FedEx and Amazon, to name but a few — were thinning out their networks. It was the wrong decision, at the wrong time, and we’re paying for it now.
Nothing about the “Delivering for America” plan worked as promised. The slowdown in deliveries as regional hubs came online in places such as Atlanta made things notably worse. These projects, and others initiated by Mr. DeJoy to bring more work “in-house,” imposed an unsustainable burden on the system that may eventually fall on taxpayers. Too many people doing too little work is a pathway to bankruptcy and failure, which is why Mr. Steiner needs to address workforce size immediately.
If he does, he proves he is the new boss, different from the old boss. There’s no time left for cuts on the margin. It’s time to swing the ax. That means no more insourcing and more outsourcing, letting the private sector perform the functions it does better and cheaper than USPS. Increase the focus on its core function: daily mail delivery to homes and businesses across the country, six days per week, as mandated by Congress.
Instead of controlling the middle mile, as Mr. DeJoy tried to do, USPS should eliminate upstream capacity and costs rather than add them and incentivize mailers, shippers and logistics service providers to enter the system as close to the final destination as possible.
This will reduce costs and improve service performance.
Mr. Steiner must decide whether he wants to continue in the direction Mr. DeJoy set with his “Delivering for America” plan, which ultimately delivered very little progress at considerable cost. The new postmaster needs to inaugurate an era that embraces public-private partnerships through work-sharing incentives for sorting, processing and transportation. It also means exiting noncore business ventures, such as payments and banking, as well as other efforts that duplicate existing commercial solutions.
The Postal Service is at a crossroads. Under Mr. Steiner’s leadership, it can refocus efforts on continuing and improving the “final mile” service that postmasters, as far back as Benjamin Franklin, have been justifiably proud of, or it can continue to let the red ink run.
• An experienced journalist and commentator who has contributed to various media outlets and is a highly regarded political analyst, Peter Roff is a former UPI and U.S. News columnist who is now affiliated with several public policy organizations. You can reach him at RoffColumns@GMAIL.com and follow him on social media @TheRoffDraft.
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