The Postal Service is playing a "heads I win, tails you lose" game with customers of first-class mail delivery.
The agency used to insist on raising the price of mailing a letter because it was billions in debt. Today it's making billion dollar a year profits, yet still insists it needs a price hike!
It was just three years ago that the Postal Rate Commission, which must OK any rate increase, gave the green light to go from 29 to 32 cents. This week the panel backed a hike for another penny, even though some Commission members said they doubted the increase was necessary.
Then why approve it?
Postmaster Marvin Runyon says the hike is necessary to fund technology investments and to improve customer service. That's a good goal, but why not do like other companies, and invest today's profits in tomorrow's improvements?
The answer is that except for first-class mail, this huge, bureaucratic quasi-independent government agency finds itself in uncomfortable competition with electronic mail, faxes and quick-delivery rivals like Federal Express and United Parcel Service.
So, in order to survive, it keeps taking advantage of its first-class mail monopoly. By boosting rates where there's no competition, the Service can cover its losses elsewhere.
This practice amounts to unfair competition. When Microsoft or the phone companies try it, an army of government antitrust lawyers swarm all over them. But then those are private companies, not a quasi-government agency.
The Postal Service, said a Government Accounting Office report four years ago, suffers from a "dysfunctional organizational structure": Unionized employees are paid up to 30 percent more than other government workers and seniority, not merit, is what's rewarded.
If the postmaster had moved aggressively to set right the GAO's criticisms, the agency could be competitive without taking advantage of its mail-delivery monopoly.
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