“The ultimate goal is to create a fair and nondiscriminatory environment for shipping around the world.”
The U.S. Postal Service (USPS) 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 the 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 USPS 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 past 11 years straight, and it’s trapped in a bizarre legal straightjacket—a legal mandate to massively pre-fund its retiree health care plans—that prevents the service from getting itself out of that hole. In response, the USPS has cut costs in areas that harm its service standards, has misattributed costs among product categories and has asked for significant shortsighted stamp price increases that could threaten the manufacturing economy. It is time to finally get the USPS back on its feet.
The problems afflicting the USPS are serious but fixable. That’s why the National Association of Manufacturers applauds Sens. Tom Carper (D-DE), 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 the House and Senate from across the political spectrum. The legislation would provide a more rational schedule for pre-funding the USPS’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 USPS 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 USPS 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). The 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, the USPS either does not or cannot collect meaningful data from foreign shippers that would allow U.S. Customs and Border Patrol to screen them effectively. Now is a prime opportunity to make clear to the USPS that these mounting losses and dangerous packages are unnecessary, unacceptable and almost certainly illegal. The 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 USPS 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 commonsense postal reform legislation so we can ensure the viability of the USPS for years to come.