McCaskill: Is USPS undercharging FedEx and UPS?

 

WASHINGTON – U.S. Senator Claire McCaskill today questioned the U.S. Postal Service’s pricing for its “last mile” of delivery in rural areas, and why she believes it may be losing money by under-charging competitors such as UPS and Fedex to carry mail to those areas.

“I have been on a harangue about giving deals to our competitors,” said McCaskill, a former Missouri State Auditor and senior member of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the Postal Service. “…We are giving a really good deal to our competitors. I’ve never seen another business entity who says, because we are so starving for volume, we’re going to take the most expensive part of our architecture, which is the last mile, and we’re going to give our competitors a deal on that last mile. And I have yet to have anyone give me the analysis that shows me that they have, in fact, at the Postal Service, considered what price they’re giving to UPS and FedEx for that last mile of delivery as it relates to our costs.”

clairemccaskillIn January, McCaskill demanded answers from the Postal Service on how it will protect mail delivery for rural Missourians and efficiently manage the cost-sharing benefits with competitors to carry mail the “last mile,” especially in rural areas, saying: “I think it’s really important we get a handle on [rural delivery times]. Those of us who are really pushing to protect rural delivery…think it’s important we know what we’re working with from a data-driven basis.”

In 2014, McCaskill asked the Government Accountability Office to look at these agreements, and the agency confirmed some of her concerns when they discovered the Postal Service wasn’t accounting for key cost-drivers such as package size and weight when making agreements, and wasn’t collecting some of the revenue it was owed from the deals.

McCaskill, a longtime advocate for postal service in rural communities, is widely credited with having waged a successful campaign over several years to save rural post offices and maintain delivery times when faced with closures and the slowing of standards.

McCaskill recently backed the Rural Postal Act, a bill that aims to improve postal service, delivery times, and standards in rural communities that have been disproportionately affected by cuts to the Postal Service. The bill—sponsored by Senator Heidi Heitkamp of North Dakota and also cosponsored by Jon Tester of Montana—would restore overnight delivery, return a faster First-Class mail standard, make six-day delivery permanent, and enact strict criteria the Postal Service would have to meet before closing a post office to ensure that rural communities are still able to easily access the mail system.

Last year McCaskill requested an examination of the interaction between the lack of adequate access to broadband technology in rural areas and the reliability of Postal Service delivery. Without efficient and effective mail service as a result of recent Postal Service consolidations, rural Missourians are put at an economic and communications disadvantage, the effects of which haven’t yet been properly studied. McCaskill also recently signed on to a request for the federal government’s top watchdog to review the Postal Service’s calculation of delivery times and standards, and she helped win a one-year moratorium on postal closings until the impact of those closings is fully understood.

  • Kim Grant

    You go, girl! For too long the machinations of postal management has been secretive and opaque. Let some light into this room and let the truth be told.