While Josh Sandbulte gets some things right about the Postal Service in his self-serving opinion piece “Why the Post Office Gives Amazon Special Delivery” (July 14): he provides an inaccurate and unfair account of the package delivery side of our business.
By law our competitive package products, including those that we deliver for Amazon, must cover their costs. Our regulator, the Postal Regulatory Commission (PRC), looks carefully at this question every year and has determined that they do. The PRC has also noted that competitive products help fund the infrastructure of the Postal Service. It is that infrastructure that enables us to fulfill our universal service obligation to deliver to each and every address in the United States at an affordable rate.
The PRC has also concluded every year that products covered by the letter monopoly do not cross-subsidize the Postal Service’s competitive products. The reason we continue to attract e-commerce customers and business partners is because our customers see the value of our predictable service, enhanced visibility, and competitive pricing.
Despite our achievements in improving operational efficiency and growing revenue, we cannot overcome systemic financial imbalances caused by legal and other constraints. For instance, the Postal Service’s ability to adjust prices of products that produce over 70 percent of our revenue is restrained by an austere price cap that does not take changes in Postal Service volumes and costs into account, and hence is wholly unsuitable to ensuring the Postal Service’s continued ability to provide prompt and reliable universal services in a self-sufficient manner.
There is a path forward that depends upon the passage of provisions in H.R. 756 postal reform bill, combined with a favorable outcome of the PRC’s 10-year pricing system review and continued innovation and aggressive management actions.
With that, the Postal Service can meet all its obligations and continue to provide the service that all Americans, including those “traditional retailers,” deserve.
Chief Financial Officer
United States Postal Service