If you’ve been paying attention to postal headlines in the past week or two, no one would blame you for thinking the U.S. Postal Service is on life support. Many customers and business partners have been asking us about the health and well-being of the Postal Service. (Even my millennial colleagues are reporting seeing the Postal Service trending in their news feeds.) As with anything related to COVID-19, it’s important to know the facts in order to understand what is real, and what is being said to be provocative rather than informative.
Challenges are Real
This is definitely a challenging time for the Postal Service, which has seen overall mail volume drop by double-digit percentages in the last two weeks. This drop has been most obvious in Marketing Mail as marketers pause, regroup, and adjust how to approach customers and prospects who are likely sheltering at home. On the other hand, commercial First-Class Mail (largely bills and statements) has seen a much smaller decline, and parcel volume has actually grown by double-digit percentages in the same time frame. This drop in mail volume will drive considerable financial adversity and liquidity challenges for the agency, estimated at $13 billion in additional losses by the end of September.
Although these are unprecedented times, and no one can say with certainty what the future has in store, we remain optimistic about the Postal Service. Despite all the blaring headlines, we expect it to survive this emergency as it has survived challenges in the past. Let’s consider a few facts that underlie that optimism:
- Postal services were established as an enumerated power of the Federal government in Article I, Section 8, Clause 7 of the U.S. Constitution, which empowers Congress “to establish Post Offices and Post Roads.”
- The Postal Service we know today was formed nearly 50 years ago. Since then, it has relied almost exclusively on the sale of products and services (i.e. postage rate payers) for its income. In those 50 years, the Postal Service has weathered business cycles and changes in how Americans communicate.
- The Postal Service is a critical public service, and just closing or privatizing it is not a realistic option, especially politically.
- Even in the midst of the current pandemic, the Postal Service has been designated an essential enterprise. The agency has become a physical lifeline to many Americans during this crisis, particularly in rural areas, and could play a crucial role in the November elections as more states move to voting by mail to curtail the spread of COVID-19.
Stimulus Funding is Needed
In order for the Postal Service to survive and thrive, the Federal government must take its responsibilities to this agency seriously. Like many other businesses, it needs financial support to deal with the impact of the COVID-19 crisis. The Postal Service Board of Governors, whose five Senate-confirmed members were all appointed by President Trump, is asking Congress for $75 billion, including a $25 billion cash injection to offset expected losses, a $25 billion grant to fund “shovel ready” projects to modernize the agency, and $25 billion in unrestricted borrowing authority so the agency can address future contingencies.
The future of the Postal Service has been the focus of debate in Washington for more than a decade, and that debate has not been put aside despite the current crisis. Even as Congress and the Trump Administration work to provide relief to other parts of the American economy, the battle over the Postal Service continues.
An article in the Washington Post over the weekend noted that despite broad Congressional support, the President’s animosity toward the Postal Service was largely to blame for the limited amount of aid (only a $10 billion line of credit with significant strings attached) provided to the agency in the CARES Act.
As Congress and the Administration begin to consider the next COVID-19 relief bill, now is the time to put politics aside. Just as relief has been offered to small and large businesses, the Postal Service and the $1.7 trillion industry it supports need help now. Take a moment to reach out to your elected officials and let them know the Postal Service is an important part of America’s infrastructure and how important it is to the future of our industry. An easy way to let your senators and representatives know you support the Postal Service is to text USPS to 50409.
Thank Your Letter Carrier and Other Postal Workers
We’re also optimistic about the future of the Postal Service because of the “postal proud” spirit of its people. Despite daunting odds, the more than 600,000 USPS employees have ensured that the vital mission of the agency to bind the nation together has continued, delivering mail, medicines, and other packages ordered online.
As the people of the Postal Service say, “The eagle always faces forward.”
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