USPS faces huge challenges–again.

Joe Nocera outlines the business nightmare that is the United States Postal Service:

What can he do to fix the situation? Surprisingly little. His employees have clauses in their union contracts that forbid layoffs. Nor can he renegotiate their gold-plated benefits, the way, say, the auto companies did when their backs were against the wall. Political pressure makes it nearly impossible to shut down any of his company’s 34,000 facilities, no matter how outmoded or little used. He can borrow money, but under the law, he can add only $3 billion in debt a year — an amount that isn’t going to come close to covering his losses.

Oh, and get this. Every year between now and 2016, he has to put aside over $5 billion to finance health benefits for future employees. You read that right: future employees. There isn’t another business in the country that finances benefits for employees it hasn’t even hired yet.

“He” being Jack Potter, the postmaster general.  USPS is expected to run as a business–primarily, turn a profit–while subject to Congressional oversight and decades of bureaucratic provisions.  Aside from the health benefits and inability to adapt staff and facilities to market realities, USPS cannot even price its service without petitioning Congress.  That’s a tough way to have to run a business.

Despite Potter’s successes over the years, the Government Accountability Office has deemed it an “at risk” agency.  Nocera notes that USPS will likely fail to fund future health benefits or miss making payroll in the coming months absent an intervention.  The top interventions being discussed are reducing the number of post offices and eliminating Saturday service.  Yet neither seems likely.

These were the same options proposed almost a decade ago when I did some consulting work with USPS, and again half a decade ago as I taught several USPS executives in their public affairs graduate program.  The ideas were in no way new at the point, and there were few within the company that seemed to find them objectionable.  The one thing many people found highly objectionable was any reduction in force.

USPS employees more people than any US company except Wal-Mart.  It’s never easy to contemplate job losses, but it’s hard to see how USPS can continue running as it currently does.  It’s even harder to make the case that it should.

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