Statement for the Record
May 30th, 2023
Before the Government Operations Subcommittee
Committee on Oversight and Accountability
U.S House of Representatives
We thank Congress again for the PSRA, and especially its instruction to run mail and packages together through one network six days per week. The integrated network should afford USPS an opportunity for real efficiencies of scope and scale, enabling cost savings, and benefitting everyone around the country. But we are very concerned about how well that opportunity can be seized given the ominous data on mail revenues and volumes.
Businesses that are postal-reliant understand that some elements of the Delivering for America Plan are positive, but they are overshadowed by relentless, twice-yearly, postage rate increases endangering the Postal Service’s mail business and destructive to small and medium-sized businesses and consumers often considered the backbone of American employment.
Many of the assertions made at the hearing about the causes of the Postal Service’s current condition are incorrect and counterproductive to the cooperative effort necessary for USPS to recover. We must all look to the future and start to develop the base for determining whether additional and, if so, what changes to the law will permit the Postal Service and its customers to both succeed in this new environment, while benefitting the public by preserving this historic and still relevant institution for future generations of Americans.
The Coalition for a 21st Century Postal Service1(C21) views the Delivering for America Plan (DFA) as perhaps the most consequential transformation of the Postal Service since postal reorganization. It deserves close, and ongoing, scrutiny from Congress, especially since there are serious concerns about the accuracy and characterization of the events that brought USPS to the DFA, and the likely profound and negative impact on mail. Yet until now, more than two years after it was implemented, there has been no hearing in either the House or Senate. We hope that this hearing can be the beginning of a series to look at the plan and its impacts on the health and sustainability of the customer base.
C21 represents a broad cross-section of a vast postal-reliant industry that generates $1.6 trillion in sales and employs more than 7 million workers nationwide2. That amounts to roughly 5% of GDP. USPS, as all Committee Members know, is an organization designed to be self-funded, which means it is dependent upon its customers, and particularly upon the business community which generates more than 90% of its revenues. Given that pivotal impact, Members’ oversight of the DFA would benefit from the views of the business community on their use of the Postal Service and reactions to the DFA.
It is important to state for the record what most Americans and policymakers believe: the Postal Service is critical to the economic and social health of our nation. Whether sending bills, receiving payments, marketing through catalogs, shipping with retailers, sending greeting cards to loved ones, or delivering eagerly awaited newspapers and magazines, mail and packages create value for our economy and businesses and in the lives of Americans. Nonprofits, including critically to the nation’s social fabric, charities, also heavily depend upon USPS. Together these products provide a high-quality experience at the mailbox and keep mail viable. And if anyone had any doubt about the ongoing importance and necessity of the Postal Service, it was erased by the heroic performance of the institution and its working men and women throughout the depths of the pandemic. Critical infrastructure indeed.
Members of C21 include businesses of every size. There are large businesses that send tens of millions of pieces of mail each year, marketplaces that enable consumer shopping, mail service providers, and many other businesses in every state in America. There are small and mid-sized businesses everywhere that are part of our coalition which depend heavily on USPS, and especially so in rural areas of the country.
The views and experiences of these businesses we believe should be valuable to Members of Congress. Not just from their impact – the aforementioned 90% or more of postal revenues they generate – but because of their experience with and insights into the system, including: the challenges of dealing with the Postal Service in 2023; how have rates and service impacted business decisions on using USPS? and do rates and service prompt decisions to leave the mail for digital, when businesses might otherwise mail?
Since the consensus remains that USPS should continue to be self-sufficient, meaning businesses, nonprofits and consumers sending mail and packages pay for the USPS, America cannot afford a nationwide network for mail delivery without package revenues and profits; likewise, it cannot have a profitable package business without the integrated mail and package network. The economies of scale and scope make the USPS possible.
Transforming and modernizing the USPS service network may prove an overdue upgrade, but it is not a panacea. Relentless increases of price, twice per year, are having a predictable and deleterious effect on mail. Since the beginning of the fiscal year, mail volume is off more than 8%, and revenues are barely above break even 3. Competitive services, a bright spot for USPS, are relatively stable on volumes and revenues, although not growing at this juncture. C21 continues to be grateful to this Committee and the Congress as a whole for enacting the Postal Service Reform Act of 2022 (PSRA). One of its key provisions mandates that mail and packages be moved through one network six days per week. We believe this is very constructive and are hopeful that that joint network will yield serious operating efficiencies that will benefit the Postal Service, its business and nonprofit customers and the general public.
C21 consists of business mailing associations and companies – newspapers, advertisers, catalogers, e-commerce, parcels, greeting cards, financial services, telecommunications, insurance, small businesses of every kind, paper, printing, technology, envelope manufacturing, mail services, who understand the essential role of USPS and want it sustained for the future. It broadly represents an industry generating $1.6 trillion in sales and supporting 7.3 million private sector jobs.
Learn more at 21stcenturypostal.org.
1 C21 consists of business mailing associations and companies – newspapers, advertisers, catalogers, e-commerce, parcels, greeting cards, financial services, telecommunications, insurance, small businesses of every kind, paper, printing, technology, envelope manufacturing, mail services, who understand the essential role of USPS and want it sustained for the future. It broadly represents an industry generating $1.6 trillion in sales and supporting 7.3 million private sector jobs. See Chapman and Johnson, EMA Foundation’s US Mailing Industry Jobs & Revenue Study, pp. 8-9 (2019). View More
2 Chapman and Johnson, Id at n1.
3 A key construct of USPS pricing strategy: raise rates, anticipate losing some volume in response but come out
ahead on revenues.