Should The U.S. Shut Down The Postal Service?
Yes It Should and I Explain Why
Should we still have a United States Postal Service (USPS) and if so, what should its role be? Why ask these questions? Because once again we are seeing in the news differing opinions on the USPS. On the right, we are seeing politicians and pundits suggesting the USPS should be abolished, or its business model significantly changed. On the left, politicians and pundits are suggesting that the USPS is vital to national interests and should not be touched. Which opinion is correct?
Before considering if the USPS should be changed, eliminated, or kept we need to understand what the USPS is and what it does. The official definition of the USPS on Wikipedia states the following:
“The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or simply the Postal Service, is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the United States, its insular areas and associated states. It is one of a few government agencies explicitly authorized by the Constitution of the United States. As of 2023, the USPS has 525,469 career employees and 114,623 non-career employees.
The USPS has a monopoly on traditional letter delivery within the U.S. and operates under a universal service obligation (USO), both of which are defined across a broad set of legal mandates, which obligate it to provide uniform price and quality across the entirety of its service area. The Post Office has exclusive access to letter boxes marked "U.S. Mail" and personal letterboxes in the U.S., but has to compete against private package delivery services, such as United Parcel Service, FedEx, and DHL.”
To give some scope as to the size of the USPS, as of 2023, the Postal Service operates 33,641 Post Office and contract locations in the U.S. and delivered a total of 127.3 billion packages and pieces of mail to 164.9 million delivery points in fiscal year 2022. There is no question that the USPS is large and plays a significant role in the delivery of mail and packages in the United States. But is it necessary?
To understand the USPS better, let’s look at how it generates revenue. The USPS breaks its revenue down into four categories: first class mail, marketing mail, packages, and other services. However, the first three make up the bulk of the USPS $70 plus billion in revenue.
Let’s take a closer look at those revenue sources. $32 billion comes from packaging services. Having packages delivered is an important service that most of us use regularly, particularly since online retailing has become so popular. Does the government need to deliver packages? When looking at what a government should and should not do, we should look at what the private sector offers. The government doesn’t run grocery stores primarily because we have grocery store businesses that provide us with grocery stores. Chat GPT says there are 348,000 business in the United State offering courier and local delivery. Two of those include FedEx and UPS. So, with all those packaging services available, do we really need the government to deliver packages? The obvious answer is that we do not.
The next revenue item is marketing mail. The USPS generates about $15 billion from marketing mail. What is included in marketing mail? Letters, postcards, and flyers. However, marketing mail revenues are down significantly due to digital marketing. In 2023 marketing mail revenues dropped by over 11%. Further, marketing mail revenues are supported by the fact that the USPS has a monopoly on the delivery of flyers to your mailbox. That’s right. It is illegal for any other company to drop a flyer in your mailbox. That is why other people who deliver flyers just leave them on your front doorstep, or tape them to your door. It is interesting to note that if a business sends me junk mail to my email address without my permission, that business could be breaking US Federal laws. But the United States government, through the postal service, can fill up my mailbox with junk mail without my permission. I also wonder why aren’t the environmentalists and climate change advocates on this issue. We kill millions of trees a year so my local grocery store, through the US government, can fill my mailbox with the grocery store bargains of the week. Well, we know why. The environmentalists and climate change advocates are also big government advocates and pointing out that the government is facilitating the killing of millions of trees to fill mailboxes with unwanted flyers would go against their big government ideals. So, do we really need the US government to deliver marketing mail? Obviously, we do not.
The final category of mail is first class mail. Most of first-class mail is letters. What kind of letters are these? Most of the first-class mail is business related, and includes credit card statements, bank statements, insurance documents, tax documents, marketing materials and loan statements. Increasingly many of us are receiving these types of documents electronically. Over the last five years first-class mail volume has dropped close to 30% and that trend is expected to continue. Almost every business, even small ones, now provide for the delivery of invoices and statements electronically. The electrician, the plumber and the air conditioning guys who recently worked on my home remodel all sent their invoices electronically and I paid all of them electronically. A few weeks ago, I wanted to send a letter to a Federal government agency. There is no mailing address on the website. Even Federal government agencies want you to email them, as opposed to sending a letter. So, do we really need the US government to deliver first class mail that can easily be downloaded electronically? Obviously, we do not.
We don’t need the US government for the delivery of packages, marketing materials, or business letters. Is there any reason we do need a postal service? It is possible that some very small group of people in the US live in a place where there is no FedEx or UPS delivery, and who don’t have access to the internet to download business mail. I have never met such people, and I have no idea where they live but I will accept that it is possible those people do exist. How do they get mail? How about the US government paying some private business to deliver the mail to caves of these isolated hermits. In the last five years, the US Postal Service lost $33 billion. Seems like we could deliver mail to all those cave living hermits for less than that.
There are other benefits to winding down the post office. Without the monopoly powers over everyone’s mailbox, many private flyer delivery businesses would flourish. Knowing the postal service is not going to be around, people and businesses would accelerate the use of electronic mail, saving millions of trees. Further, the US Postal Service owns 8,500 buildings. Estimates are that these real estate holding could be worth more than $20 billion. An orderly liquidation of these properties would provide cash that we could use to pay off some of the national debt (I know that$20 billion is a drop in the bucket compared to the size of our national debt but maybe paying a small amount of it off might be the start of a fiscally responsible government). Further, with the postal service losing about $6 billion a year, we could save that money.
Given all the reasons that make shutting down the postal service a logical and rational decision, why are so many politicians like Bernie Sanders, Elizabeth Warren, and Jerry Nadler so vocal about keeping it going? A thinking person might figure it has something to do with the 600,000 plus postal service employees and the political support of those employee’s union for the Democrat party. It is a shame that those people we elect to office to manage the affairs of our country responsibly can be bought off by the promise of votes and money just so they can stay in power.
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Your article definitely provided food for thought. And while I do get quite irratated by the insane influx of marketing advertisements that find its way into my mailbox. I do very much like to still receive my statements (bank statements, bills, etc.), via USPS, and no I do not live in a cave. I guess it is the "old school" in me, but I have also opted-in for some things to be delivered electronically. I do believe that there can be a solution for the slaughtering of trees, I mean heck, everything nowadays is made out of recycled materials, why not begin building out that industry more & come up with more sustainable solutions. I also do believe that our country (and really the whole world) has become so abundantly intertwined and too reliant on technology. Is it not possible that our entire network could experience major problems and/or attacks that could fracture our capacity and leave us defensless to operate?
While I agree that there may be a need to revamp the USPS, but to shutdown the service all together to me is unsettling. Would it mean that now instead of the majority of my mail coming from USPS, that I would then need to begin sifting through the barrrage of companies that will prop up. Not to mention the constant advertisements that I will have to deal with. And yes, there are an exhorbant amount of electronic adsthat we all get hit with too. Would stopping the paper advertisements stop the gauranteed increase of electronic ads from propping up everywhere?
The other issue I have with shutting down USPS, as you eluded to, are the employees. I don't believe there would be any arguement to the fact that anything can be interpreted in a way that fits one sense of thought or another, I mean even scriptures in the bible itself are up to interpretation. But to say that politicians on the Democratic/Progressive side of the aisle, oppose the shutting down of USPS simply because collectively the employees yield political power. Is to first is to say that the USPS is solely made up of employees who vote on the democratic side, really? More distressing is where would all of those employees go, what happens to those who are on the verge of retirement in the next 4-5 years, are their pensions affected; will these employees now be forced to learn different skills in order to even get back into the job market, would they even find wages/salaries that matched what they previously were paid? How does such a change and shock to the system affect our economy, and would the short term savings truly out weigh everything else? Lastly, how would such a change effect us on an international level, would other countries now be forced to completely revamp their system as well?
I just hope that, IF such a change as closing down USPS happens that deeper consideration is given to how it would or wouldn't truly affect us all...and not just simply through a political lens.
I enjoyed your article and appreciate the thought that went into it.
I agree the USPS should be out of the parcel business.
I don’t like the junk mail, but feel if it turns a profit to offset costs on letter delivery, so be it…. But the monopoly must go. Anyone should be able to be in that business.
I understand and use much of the electronic delivery of business mail, but also recognize we have people totally adverse to electronic delivery (like my wife) and would guess others do not have the ability to use e-delivery. Don’t know the numbers on this and would like to see them.
In short, I would cut it down to letter delivery only which must not lose money. If they can take along junk with that to defray costs fine. But the junk mail monopoly must go and they need to get out of the package business.
Thank you for this…. Good conversation and thought provoking.