The U.S. Postal Service is facing a set of critically important decisions. The combined effects of the economic downturn, the disruptive consequences of electronic diversion, and a burdensome and flawed retiree health care prefunding schedule have contributed to $20 billion of losses in the past 4 years. The Postal Service expects that it will not have enough cash to meet its payment obligations in 2011.
Less urgently, but of more importance in the long term, communications and parcel delivery have undergone radical transformation in recent years, yet the Postal Service has not modernized or been permitted to update important aspects of its mission to reflect the impact of globalization and the digital age. Instead, the Postal Service has been required to stand still in the middle of a revolution in the access and use of information.
In this emerging environment, neither the Postal Service’s traditional functions nor digital age infrastructures offer perfect solutions to Americans’ needs. Both information services and physical delivery are important, and determining the right course for the Postal Service’s next 10 or 20 years is difficult. Nevertheless, decisions about the Postal Service’s future will be required very soon, and debates have yielded few definitive
We believe there is a need to step back from the immediate issues and take a deeper look at unanswered foundational questions concerning the role of the Postal Service. The answers to these questions can serve as beacons to navigate into the future. The Postal Service faces an array of conflicting and even contradictory mandates. Without a solid foundation to guide the transformation of the postal system, there is a risk of further piecemeal changes that will simply add to the confusion.
This paper poses eight fundamental questions that we believe are critical for determining the role of the Postal Service in the 21st century. We discuss some alternatives for responding to these questions, but we purposefully do not suggest answers. There are many possible answers. Policymakers, especially elected officials representing Americans, should engage in a disciplined, deliberative process to reach decisions about these foundational issues. The questions and some alternatives appear in Table 1. Clear and decisive responses to these fundamental questions are needed to develop a coherent, consistent postal policy for the present and the future. A failure to reach agreement will frustrate efforts to find a long-term strategy for the Postal Service. Any plan will lack the stability of consensus consensus and fall prey to the same endless historical debates.
These questions cannot be answered in isolation. Each is best considered in relationship to others. For example, an answer to whether the Postal Service should be organized as a profit-maximizing business or a national infrastructure will be influenced by decisions on the Postal Service’s universal service obligation, social responsibilities, and optimal role in the digital age. In turn, the nature of the Postal Service’s mission will influence its governance model, financing method, and placement in the competitive marketplace. Finding a consensus among stakeholders and policymakers on the answers to these questions will not be an easy process, but if agreement is reached on the role of the Postal Service, developing a business model that will place the Postal Service on a sustainable path to provide vital services to the American people in the 21st century will be possible.