The threat of privatization has never been greater for the United States Postal Service. Recent Congressional hearings and op-eds point to a gradual takeover as a major threat to the 250-year-old public service.
The USPS is one of the most popular federal agencies, due to its mission to “bind the nation together”, providing universal mail and delivery services to all. However, its unrivaled delivery network and huge real estate portfolio have also made it a long-standing target for corporate greed.
U.S. Mail Not For Sale has already documented Wall Street’s moves to engineer a corporate takeover of the Postal Service. We sounded the alarm when reporters were briefed that the Trump Administration planned a takeover of the USPS, as a precursor to privatization.
In recent weeks, we have seen signs that a longer and perhaps more dangerous game is at play – a gradual corporate takeover of the people’s Post Office that degrades the service and hurts its popularity.
A privatizing Postmaster General would have a great deal of scope to sell-off the Postal Service from the inside, without ever getting Congressional approval. With a friendly Board of Governors, he or she would likely embark on a contracting-out exercise that could threaten any individual part of the network, leaving the USPS as just a shell.
One of Postmaster General DeJoy’s big initiatives was to take much postal processing work back in-house. Under his predecessors, big shipping houses had been provided deep discounts to process mail themselves and drop it into the USPS system for the costly “last mile” delivery service. In testimony to the House Oversight Committee, DeJoy described this as the “hollowing out of our network”, which “created an environment for consolidator shippers to thrive while [the Postal Service] struggled to survive.”
This attempt to balance the Postal books at the expense of discounts for private sector competitors drew the ire of many in the private shipping industry and its cheerleaders. Tom Schatz, president of corporate thinktank “Citizens Against Government Waste” called for an immediate end to the Postal Service’s attempts to build up its package-processing facilities because they “duplicate existing efficient private sector operations.” In a recent article, Stephen Kearney, President of industry group, the Alliance of Nonprofit Mailers went further than arguing for a freeze; he argued for the “effective privatization” of everything between entry into the Postal system and the final delivery.
Schatz was one of the witnesses at a recent hearing of the House Government Operations Sub-Committee entitled “The Route Forward for the U.S. Postal Service: A View from Stakeholders”. Three of the hearing’s five witnesses testified in favor of a model of partial privatization. Michael Plunkett, President and CEO of the Association for Postal Commerce argued that the postal service should “…concentrate on last mile delivery and first mile access and restructure its products and its incentives…” He argued this would create “savings opportunities” despite DeJoy’s previous testimony that this approach had hollowed the network and left the network struggling to survive in the past. Plunkett’s organization advocates for the shipping industry, including FedEx, where incoming Postmaster General David Steiner served as a Board member.
In a question to Jim Cochrane of the Package Shippers Association, the powerful House Oversight Committee Chairman, Rep. James Comer, revealed that he had lobbied the previous Postmaster General to “privatize the sorting of the mail”. In response to the question, Cochrane replied that, with “financial incentives”, his organization’s member corporations could bypass USPS processing and distribution centers and deliver 80 percent of the mail directly to the Post Office.
When Wells Fargo equity analysts published their blueprint for privatizing the Postal Service, they recognized that strong public support, strong workers’ unions, and bipartisan political support would represent a challenge to passing legislation for the privatization of the public Postal Service.
American Postal Workers Union president, Mark Dimondstein, has warned against the “four D’s” of privatization. First they Defund the service, then they Degrade it – hurting its reputation and customer-base, next they Demonize the workers, and finally they can Dismantle it.
Hollowing out the Postal Service’s mail and package processing and distribution network is a failed business model. It keeps physical Post Offices and delivery – the most expensive aspects of the network – in public hands, while providing subsidies for corporations to make profits on the rest. Retreading this journey of failure boosts private profits while defunding and degrading the service – setting the scene for the full-scale privatization of our public Postal Service.
This gradual approach to the corporate takeover of the Postal Service has been tried before. In 2013, then-Postmaster-General Donohoe announced a plan for privatization of retail operations by shifting them out of neighborhood Post Offices and into Staples stores. After four years of hard campaigning, the Stop Staples campaign ended a boycott of the retail giant after USPS management agreed to end their contract.
Just as postal customers and workers were able to defeat those privatization efforts in 2017, we must work together again to stop the privatization-by-stealth of our public Postal Service.