The U.S. Postal Service is in trouble. It has been for a long time. And that’s worrying for a lot of people in our country, including manufacturers. Affordable mail service is critical to American manufacturers, even in the internet age – perhaps especially so. Production, billing, advertising and other important needs of a successful company depend on a reliable, affordable, and efficient postal system with universal service. Many manufacturers rely directly or indirectly on USPS to get their products to customers. Others make indirect inputs like shipping products designed to support our country’s modern logistics backbone. All told, the Postal Service supports a $1.4 trillion industry on which millions of jobs depend. Yet today the USPS is functionally broke, reporting net financial losses for the last eleven years straight, and it’s trapped in a bizarre legal straightjacket—a legal mandate to massively pre-fund its retiree healthcare plans — that prevents the service from getting itself out of that hole. In response, the Post Office has cut costs in areas that harm its service standards, has misattributed costs among product categories, and has asked for significant short-sighted stamp price increases that could threaten the manufacturing economy. It’s time to finally get the Postal Service back on its feet.
The problems afflicting USPS are serious but fixable. That’s why the NAM applauds Senators Tom Carper (D-Del.), Jerry Moran (R-KS), Heidi Heitkamp (D-ND), and Claire McCaskill (D-MO) for introducing legislation that would take a big step toward achieving real and bipartisan postal reform. The Postal Service Reform Act of 2018: Improving Postal Operations, Service, and Transparency bill, like its House companion the Postal Service Reform Act of 2017, is the result of years of hearings, fact-finding, negotiation, and compromise between members of House and the Senate from across the political spectrum. The legislation would provide a more rational schedule for pre-funding the Postal Service’s retiree obligations, while giving the USPS more of the flexibility it needs to adapt to a changing economy and run its service more like a regular business. Legislation like this simply underscores the fact that the Postal Service can effectively tackle its problems without resorting to drastic measures— like hiking the price of only a few products like stamps— if Congress gives it some flexibility, and we thank the sponsors of both the Senate and House measures for working hard to put this legislation together.
On a related note, as the postal reform debate moves forward in Congress manufacturers hope members of both parties will take the opportunity to address other problems like international package deliveries too. The Postal Service loses hundreds of millions of dollars per year providing far-below-market rates for inbound packages from countries like China that abuse an international agreement developed by the Universal Postal Union (an international agency based in Switzerland). USPS loses money on every single package it takes inbound from China, and the annual growth in these package deliveries is astounding. Many of these packages contain drugs or other contraband, and yet USPS either does not or cannot collect meaningful data from foreign shippers that would allow U.S. Customs and Border Patrol to effectively screen them. Now is a prime opportunity to make clear to the Postal Service that these mounting losses and dangerous packages are unnecessary, unacceptable, and almost certainly illegal. USPS should not be allowed to raise shipping rates for American shippers to pay for this absurd subsidy for foreign competitors and counterfeiters. And Congress can give them the relief they need by clearly prohibiting the implementation of any agreement that unfairly discriminates against U.S. shippers, and by clearly requiring the Postal Service to collect advanced information on foreign shipments.
We hope Congress will do just these things, just as we hope members of both parties will work together to pass common-sense postal reform legislation so we can ensure the viability of the USPS for years to come.