New Coalition Formed to Help Postal Package Delivery

The Package Coalition has been formed with the goal of “preserving affordable, reliable postage package delivery services” from the Postal Service. The members include Amazon, Pitney Bowes, and the Columbia Sportswear Company, among others.

Goal

According to a press release, “the goal of the Package Coalition is to work proactively with policymakers and the public to highlight the importance of the postal package delivery services to American businesses and consumers.” This group says that the Postal Services package delivery business more than covers its costs, saying that last year it contributed an additional $7 billion to the Postal Service bottom line.

They are also any attempts to increase the Postal Service package delivery prices.

“While we support improvements in efficiency, we oppose legislative or regulatory changes that would force the Postal Service to raise its prices above market rates; forcing the Postal Service to raise its prices for package delivery services will harm, not help, Main St. businesses and consumers,” the group’s website said.

This group is also against privatizing the Postal Service.

The Coalition is also working to correct what it says are common myths about the Postal Service. One myth listed on its website is that the Postal Service loses $1.46 on each package it delivers. “The legal requirement that prices for the Postal Services’ package delivery services must cover their cost means that this simply can’t be true. References to a per-package loss appear to rely on a biased, non-public research paper whose authors seek to do business in the Postal Services private competitors.”

Financial Losses

The United States Postal Service has gained much attention in recent years because of its sizable financial losses. This has led to calls for Congress to step in and pass legislation to help turn its finances around. According to the 2019 White House budget proposal:

“The Budget promises to reform the USPS to allow the Agency to meet its financial and service obligations with business revenue, as intended, rather than a taxpayer-financed bailout. The reform proposal includes changes to USPS’s rate-setting; delivery schedule and methods; and updated health and pension costs consistent with government-wide reforms proposed for federal employees.”

The package delivery business is doing well (shipping and packages revenue grew 9.5% according to Postal Services Q2 financial results) but Postmaster General Megan J. Brennan said the gains from the business will not be enough to sustain the Postal Service long-term.

“Although we continue to win customers and grow our package business, these gains are not sufficient to offset continuing declines in our mail business, which is our main source of revenue and contribution,” Brennan said. “We will continue to do everything within our control to improve operating efficiencies, manage expenses, expand our use of technology, and keep mail affordable, but these actions must be combined with regulatory and legislative changes.”

A recent report by the Government Accountability Office said that given its financial condition, the Postal Service will face some tough choices in the near future. It can’t afford to spend on everything it wants because it “faces a serious financial situation with insufficient revenues to cover expenses.”