GAO’s Description of Privatization Creates a Straw Man


Liberalized national posts have illustrated viable privatization or corporatization options. All of these options maintain the integrity of the national post and have retained most of the pre-liberalization workforce of the enterprise. Furthermore, these privatization approaches have generated a profitable, self-sufficient, national post that pays corporate taxes, and in cases in which the government still owns shares, dividends to the government shareholder. Restructuring of transportation and telecommunications seems to work best if the resulting entities are national entity. In trucking, regional carriers merged over time to take advantage of opportunities to offer better service to meet customer needs and minimizing costs in order to offer competitive prices. In rail, mergers [...] Read more »

If UPS can do it why can’t the USPS

In its conference call discussing its 2nd Quarter 2010 results,  UPS explained that the growth in its profitability this quarter reflected the fact that while volumes grew slightly, both labor hours and miles driven were down.    The decline in the use of labor and transportation assets reflected a more streamlined network than what existed a year earlier. The streamlining put downward pressure on the total work hours of its Teamster employees. In addition to streamlining its network, the total complement and work hours of Teamster employees, UPS also made major strides in cutting layers of management by eliminating a significant portion of its district and regional management.   Elimination of middle [...] Read more »

Optimizing the Postal Service Network and 6-day Delivery

One of the benefits of the 6-day to 5-day proceeding is that it provides an enormous amount of data relevant for trying to understand the Postal Service’s strategy to control costs.  A recent response by the Postal Service to an interrogatory by Douglas Carlson provides the first nationwide picture of the Postal Service’s effort to consolidate sortation on Saturday among fewer facilities. The Postal Service can consolidate sortation of collection mail that is collected on Saturday because it has at least 12 hours of time to transport the mail for sortation at a distant facility and get that mail back for final sortation at the destination facility.  The list of [...] Read more »

Saving The Public Enterprise Model – Who Pays?

Tomorrow, the House Oversight and Government Reform Committee will receive testimony on three reports detailing changes requiring congressional or regulatory action.  These reports are Ensuring a Viable Postal Service for the Postal Service: An Action Plan for the Future by the U.S. Postal Service U.S. Postal Service: Strategies and Options to Facilitate Progress toward Financial Viability by the Government Accountability Office (GAO) The U.S. Postal Service’s Financial Condition: Overview and Issues for Congress by the Congressional Research Service (CRS) All three reports present changes that are designed to allow the Postal Service to retain its status as a self funding government enterprise.    The changes identified in the reports are [...] Read more »

Postal Policy: Now its Congress’s Turn

Now that the Government Accountability Office report is out it is time for Congress to get down to the serious business of re-evaluating the current business model and regulatory framework.  Congress is starting this process with hearings in the House and Senate, this week and next. In preparing for these hearing, members on the relevant committees have a significant challenge preparing for the postal and other governmental witnesses.Both hearings will focus on reports by the Postal Service, Government Accountability Office and the USPS Office of Inspector General. Federal Budget Treatment of the Postal Service by the USPS OIG The Postal Service’s Share of CSRS Pension Responsibility by the USPS OIG [...] Read more »

Could the Budget Kill Efforts to Save the Postal Service?

In the next few days, President Obama will deliver the State of the Union Address and reveal the 2011 budget.   White House spokesman have already announced that the budget will include a freeze in discretionary spending in fiscal years 2011 through 2014.    The spending freeze creates an additional barrier on top of the normal budget scoring process to efforts to find a solution to the Postal Service’s financial problems.    The budget scoring process put the retiree health care payment schedule in place in order for the Postal Accountability and Enhancement Act (PAEA) to pass.   The budget scoring process derailed the normal legislative process as a method to deal with [...] Read more »

Negotiating Changes in Retiree Health Payments

This blog has repeatedly noted the impact of Congressional legislation on postal operations and its ability to be financially viable.   In the Conference Report accompanying HR 3288, an appropriations bill covering the Departments of Transportation, Housing and Urban Development and related agencies, Congress lays out specific instructions to the Postal Service, the Postal Regulatory Commission, Office of Personnel Management (OPM), the Office of Management and Budget (OMB), and the Government Accountability Office (GAO).   Two of these instructions are new and significant and are in bold below. First, OMB, OPM and thethe Postal Service are directed to “develop a fiscally responsible legislative proposal, for consideration by the appropriate congressional committees, that [...] Read more »

The Postal Service, President Obama, and the Budget

In the next sixty days, President Obama will have two opportunities to lay out administration policy regarding the Postal Service.  These opportunities are the State of the Union address and the President’s budget for FY2011. Up to now, President Obama has mentioned the Postal Service only to illustrate the fact that private firms can compete with a public health care plan last summer.   His comments suggested that the financial problems of the Postal Service were serious enough to generate the attention of the White House. Unless there is some economic miracle, the Postal Service will have a negative impact on the Federal budget and budget deficit for at least the [...] Read more »

Postal Service as Editorial Fodder

A recent editorial by the Washington Times and a columnist in the Los Angeles Times provide illustrations as to how ideological predilections and reporting on a deadline produce more heat and less light about how to solve the problems facing the Postal Service.   These commentaries reflect the seasonal interest in the Postal Service use it to ship packages and send correspondence that they rarely send in the other 11 months of the year. Readers of this blog are more familiar with the problems that the Postal Service faces these writers.   They will have no problems identifying how the writers of the two pieces illustrated their minimal knowledge of the postal [...] Read more »