A postal reform bill containing multiple options to improve the profitability of the U.S. Postal Service is being considered by the U.S. House Committee on Oversight and Government Reform. While the mailing industry is most upset about the bill’s proposal to increase postal rates by 2.15%, I want to focus in this article on a separate component of the bill that hasn’t gotten as much attention.
The bill includes a plan to phase out to-the-door mail delivery for businesses and new residential addresses after 2016. While the bill doesn’t require that all direct-to-the-door delivery be discontinued, it does allow the U.S. Postal Service to identify current residential areas that they would like to convert to centralized delivery and spells out the process by which delivery to these areas can be changed.
If 40% of the addresses within one of these identified areas agree to convert to centralized delivery, a cluster box goes up, potentially at resident expense. And while people who refuse are not automatically converted to cluster box delivery, any residents who move in later will have no choice but to pick up their mail at the centralized location.
Yikes! One of the many pleasures of moving from an apartment to a single-family home was having our mail conveniently picked up and delivered at our house. If this bill passes, it will clearly be only a matter of time before this convenience is a thing of the past. Since my gut reaction to this proposal was so negative, I decided to read up on the history of the Postal Service.
It turns out that there’s been some sort of mail delivery in what is now the United States since at least 1692. One of the first things the breakaway colonies did in 1775 was to appoint Benjamin Franklin as head of a new Americanized postal system. In these early days, however, mail was not generally delivered to households or businesses directly; you had to pick it up at the local post office.
This started to change during the Civil War, when Congress approved free home delivery in cities where there was sufficient mail revenue. Within a year, 65 cities had home delivery. And by 1902, mail delivery had been expanded to all areas of the country.
Unfortunately, we’ve been fighting USPS deficits ever since. Between 1861 and 1940, there were only 8 years when the Postal Service fully covered its costs. Various efforts to rein in costs have been implemented, including limiting delivery to once each day (in 1905, mail could be delivered as often as seven times a day in some cities!) and eliminating the need to knock on each door by requiring households to have a box or deposit slot for the mail. Unfortunately, USPS costs continue to outpace revenue. Between 2007 and 2015, the Postal Service lost an average of $6.3 billion a year.
There’s no question the USPS needs to save money. But is moving away from delivering mail to the door a good answer? According to Stephen Kearney, Executive Director of the Alliance of Nonprofit Mailers, this initiative is expected to save about $5 billion over the next ten years. While no one would consider $5 billion chump change, it represents less than 1% of the USPS’s total estimated $700 billion budget during these years. And these savings could at least partially be offset by reduced revenues if centralizing mail delivery affects the rate at which recipients open, read and respond to mailings.
“I think more study and analysis needs to be done to determine whether this would be a net gain for the Postal Service, its ratepayers, and the recipients of mail”, states Mr. Kearney. “Perhaps the USPS should focus more on lowering the cost of labor rather than potentially threatening the service’s relevance by trying to minimize usage of labor”.
So what do you think about this proposal? Are you happy to give up the convenience of to-your-door delivery if it saves you a bit in postage? If not, how would you recommend the Postal Service cut costs?
And if you want to do more than just voice your thoughts on this forum, you can let the members of the House Oversight Committee know what you think of the proposed bill by clicking here.
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