How to save the USPS by splitting it in two

From the Brookings Institute:

Click here to download the complete paper in .pdf format

Elaine C. Kamarck surveys the numerous and varied challenges currently facing the U.S. Postal Service (USPS), one of the nation’s oldest institutions. From a steep decline in first-class mail usage, to the rise of the Internet as the main means of modern-day communications, to immense budgetary and market strictures, and to a lack of political will to reform the agency, the USPS faces a wide assortment of problems that threaten its survival.  Kamarck observes that the USPS is expected to compete with the private sector, but yet is stifled by law and saddled with a governance structure that impedes innovation. It is neither a fully public nor a fully private organization, she writes.

In order to save the USPS, the organization must be broken into two separate entities, Kamarck argues. One organization should be a public sector organization with the sole mission of delivering on the universal mandate of delivering mail service to all Americans. The other organization should be privatized so that it is out from under the laws and regulations that make innovation and flexibility all but impossible.

Kamarck also lists the various questions Congress must answer in order to fully address all of the challenges currently preventing the USPS’s viability:

  1. Does the Federal government still want to be committed to universal service?
  2. If the political decision is to keep universal service then the question must be asked: What is universal service in the information age?
  3. Is it possible to innovate and create even more efficiencies in pursuit of the universal mandate?
  4. Can USPS develop new products and compete in the private marketplace? Are USPS leaders being distracted from the core mission of universal service by their attempts at expansion into other endeavors? Are USPS leaders and managers capable of the kind of innovation needed to compete in the private market?
  5. If USPS competes more with the private sector, what is the actual US government subsidy and are there ways to compensate for that?
  6. Will Congress let the USPS compete?

Redefining the universal mandate for an information age will allow the United States to preserve its federal postal organization, and privatizing the rest of the organization will allow for fair competition in an already robust marketplace. The USPS has served the nation well over many years, Kamarck concludes; there is no reason why it can’t continue to do so.

  • malta14

    Sure…….split it in two and privitize one part…….then when the other part fails…..privatize it too. Gee, I wonder who is behind this brilliant idea? The company who wants to run the private organization(s)?!? Meanwhile, the rest of us will pay $5 a letter and $30 a package……..oh, that’s right…..you already pay that if you are dumb enough to go with UPS or Fedex!

  • RandyF

    USPS is sort of already split in two. There is the Market Dominant side which includes First Class mail and Bulk Business Mail and Periodicals. Then there is the Competitive side which covers Express Mail, Priority Mail and Package Services.

    The dominant services are restricted in rates to only the rate of inflation. Competitive rates are driven by what the market is for package delivery services along with UPS & FedEx.

  • James Martin

    so you want pick off the meat and throw the rest at the taxpayers? Just stop allowing contracts with built in losses for the post office and see how quickly they can turn a large profit

  • James C. White

    USPS is already split in 2:
    1) The Amazon division in which every parcel bearing the Amazon logo is delivered on time or earlier by employee’s who have more than half a brain. These parcels are also treated as sacred objects by all levels of postal management who also posses half a brain or more.
    2) Everything else

  • John Penford

    How about privatizing management. They will quickly become worthless and be trashed (sent out to pasture), then the rest of us can turn it back into a good viable organization that really does serve the public–as a service not a corporation.