A new group called The Package Coalition has been formed with the stated goal of “preserving affordable, reliable postal package delivery services” from the Postal Service.
The group’s members include Amazon, Pitney Bowes and the Columbia Sportswear Company among other retailers and e-commerce companies.
Goals and Platform
“The goal of The Package Coalition is to work proactively with policymakers and the public to highlight the importance of the postal package delivery services to American businesses and consumers,” according to its press release.
The group says that the Postal Service’s package delivery business more than covers its costs, noting that last year it contributed an additional $7 billion to the Postal Service’s bottom line. It is firmly against any attempts to increase the Postal Service’s package delivery prices.
“While we support improvements in efficiency, we oppose legislative or regulatory changes that would force the Postal Service to raise its prices above market rates; forcing the Postal Service to raise its prices for package delivery services will harm, not help, Main Street businesses and consumers,” according to a statement on the group’s website.
The group is also against privatizing the Postal Service.
Myths vs. Facts
The Package Coalition is also working to correct what it says are some common myths about the Postal Service.
One “myth” it lists on its website is that the Postal Service loses $1.46 on each package it delivers. “The legal requirement that prices for Postal Services package delivery services must cover their costs means that this simply can’t be true. References to a per-package loss appear to rely on a biased, nonpublic research paper whose authors seek to do business with the Postal Service’s private competitors,” says a statement on The Package Coalition website.
President Trump has criticized Amazon on Twitter for “using the Postal System as their [Amazon’s] Delivery Boy.”
I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!
— Donald J. Trump (@realDonaldTrump) March 29, 2018
Years of Financial Losses
The Postal Service has been garnering attention in recent years because of its sizable financial losses. That has led to calls for Congress to pass legislation to help turn its finances around.
The White House has even expressed concern that the Postal Service could be headed for a bailout courtesy of the taxpayers.
According to the 2019 White House budget proposal:
The Budget proposes to reform the United States Postal Service (USPS) to allow the Agency to meet its financial and service obligations with business revenue, as intended, rather than a taxpayer-financed bailout. The reform proposal includes changes to USPS’s rate setting; delivery schedule and methods; and updated health and pension costs consistent with Government-wide reforms proposed for Federal employees.
While The Package Coalition is correct that the Postal Service’s package delivery business is doing well (the shipping and packages revenue grew 9.5% according to the Postal Service’s Q2 financial results), overall it is routinely posting losses and has been doing so for over 10 years now.
Even Postmaster General Megan J. Brennan said that gains from the package business will not be enough to sustain the Postal Service long term.
“Although we continue to win customers and grow our package business, these gains are not sufficient to offset continuing declines in our mail business, which is our main source of revenue and contribution,” said Brennan. “We will continue to do everything within our control to improve operating efficiencies, manage expenses, expand our use of technology and keep mail affordable, but these actions must be combined with regulatory and legislative changes.”
The Government Accountability Office said in a recent report that given its financial condition, the Postal Service is going to be faced with some tough choices in the near future. It cannot afford to spend on everything it wants because it “faces a serious financial situation with insufficient revenues to cover expenses.”
