The US Postal Service stands to have $8-10 billion in net losses this year. While they are not government funded, they do report to Congress. In effect, they are expected to break even, but cannot be run the “business” they way they see fit. This limits their ability to operate effectively.

Congress currently is opposed to delivery day changes, like removing Saturday or Tuesday delivery. However, they have no way to solve the cash flow problem experienced by this hybrid organization. If this was UPS, FedEx, or any other corporation, they could raise prices, cut costs, do both or get more creative.

The government changed the way the USPS operates in 1970, moving it from a government agency to a semi-private operation. Unfortunately, this makes a mess for anyone dependent on the Postal Service. The “revenue neutral” restriction means they cannot make a profit. Since they cannot make a profit, it is difficult for them to save money (like Apple has done) and take advantage of the benefits holding cash.

The government needs to either free the USPS to make its own decisions about delivery and financial management, or pull it back into the fold as a government agency. Dependable mail is still an important part of our culture. Maybe the USPS isn’t the best way; maybe it is. Either way, a corporate chimera isn’t working.

Sources

• How Does the Postal Service Pay Its Bills - http://www.slate.com/articles/news_and_politics/explainer/2001/07/how_does_the_postal_service_pay_its_bills.html
• About the U.S. Postal Service - http://usgovinfo.about.com/od/consumerawareness/a/uspsabout.htm
• Postal Service Cries Foul over Business Restrictions - http://www.thefiscaltimes.com/Articles/2011/09/06/Postal-Service-Cries-Foul-over-Business-Restrictions.aspx#page1