![]() ![]() USPS also relies on these companies for help with its own deliveries, namely air transportation since it no longer owns or operates aircraft, said Mark Jamison, a retired postmaster who serves as an adviser to the website Save the Post Office. If that volume is diverted, the Postal Service warns that growth in this area may not last. USPS acknowledged this in its 2019 annual report, saying the increase in service volumes over the past five years “is largely due to significant volume growth from three major customers, all of which are building the delivery capability that would enable them to divert volume away from the Postal Service.” The Postal Service’s revenue of $71.1 billion in 2019 is comparable to its two main delivery competitors: UPS had $74.1 billion in annual revenue and FedEx had $69.7 billion.Īmazon, which helped drive the Postal Service’s surge in parcel deliveries, also poses a major threat as it builds out its own logistics network with a delivery fleet and lockboxes. ![]() ![]() They’re frenemies,” Kosar said.Īll three companies depend on the Postal Service’s commitment to providing “universal service.” They rely on its vast and established national delivery network for their “last mile” deliveries to rural and remote areas where their own resources are limited.īut they also compete for delivery services. ![]() “There are partnerships and there’s uncomfortable competition between them. These companies are competitors but also serve roles as customers and key partners for the Postal Service. While the Postal Service has a virtual monopoly on first-class mail deliveries, it faces stiff competition in the delivery of parcels from commercial entities like UPS, FedEx and Amazon. The bill basically says quit doing that, which is not good for the Postal Service.” “It’s basically forbidding the Postal Service from continuing what it’s been doing for years - reducing the number of post offices, blue collection boxes, mail processing machines - in an effort to curb their growing costs. “It’s not doing things to better control its costs, it’s not giving it additional pricing authority, which are things you need if you want to balance your books,” Kosar said. Kosar said he’s concerned that the $25 billion bailout currently being considered by Congress is problematic because it amounts to a blank check that won’t actually help the Postal Service. “The people who need money for voting by mail are state and local election administrators whose budgets did not anticipate this level of demand.” Trump said that somehow the post office needs $25 billion to handle all these ballots, and that’s not right,” Kosar said. “Trump has confused a lot of people by conflating the post office’s situation with voting by mail. Its current resources are more than enough to enable it to deliver ballots and handle any election-related mail, according to Kevin Kosar, an executive at the R Street Institute think tank who spent over 10 years covering postal issues for the Congressional Research Service. While USPS is a government agency with federal employees, it doesn’t get taxpayer money and instead depends on commercial activities like selling postage, products and services to self fund. It’s also possible Trump, who has sent mixed messages regarding funding USPS, will agree to provide an additional $25 billion in bailout money. Plus, it currently has more than $14 billion in cash and a $10 billion line of credit under the CARES Act. These include threats from competitors and customers like Amazon, UPS and FedEx, billions of dollars in debt, costly pension and health benefits and the shift toward digital communication and marketing.Īlthough it's evident the Postal Service needs financial relief, numerous experts said getting through the election isn’t really at issue.Įven USPS itself, which initially expected to run out of money by the end of September, adjusted its forecast to either March or October 2021, thanks to the surge of pandemic-related shipping, which has enabled it to weather the pandemic better than expected. 30 have sparked Congressional review because he's a major Trump donor who was appointed by a USPS board of governors with strong ties to Trump and the Republican Party.Īmid the increased concern about election security are key issues relating to USPS’ financial outlook that have plagued it for years. On top of this, new Postmaster General Louis DeJoy’s recent efforts to initiate cost-cutting measures before the end of USPS’ fiscal year on Sept. ![]()
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