Coalition warns against U.S. Postal Service privatization

An alliance of consumer advocates, postal workers and community groups is pushing back against efforts by the Trump administration to overhaul the U.S. Postal Service (USPS) by eliminating the agency’s service requirements or by privatizing it.

Calling itself the “Grand Alliance to Save Our Public Postal Service,” the coalition on Jan. 6 plans to demand the USPS Board of Governors appoint a postmaster general who will “maintain a public postal service.” At a demonstration in Washington, D.C., the group will present the board with a petition with 350,000 signatures.

USPS announced in October that current Postmaster General and CEO Megan J. Brennan will retire Jan. 31.

“The postmaster general has wide powers to shape the mission of USPS and there is a real risk that Brennan’s successor could hand over parts of the service to private, profit-making corporations and prepare it for a wholesale sell-off,” the coalition’s petition states. “The people will rightly expect a new postmaster general who will uphold the Postal Service’s public mission and will work to preserve and enhance our national treasure.”

Last year, a task force led by U.S. Treasury Secretary Steven Mnuchin proposed wide-ranging reforms of USPS, which included possible privatization. However, any sweeping operational changes to the quasi-governmental agency would require an act of Congress. Brennan’s successor, however, could begin laying the groundwork for those changes, which come as FedEx Corp. [NYSE: FDX], Inc. [NASDAQ: AMZN] and UPS Inc. [NYSE: UPS] “eat up a larger portion of delivery in the U.S.,” Fortune magazine pointed out in a recent article on the potential for privatization at the agency.

Those three companies, among others, have long relied on USPS to deliver parcels to residences and businesses once the parcels are inducted into the postal network. USPS, which is required by law to serve every U.S. address, has historically offered the delivery service, known as “Parcel Select,” at cheap prices.

The combination of “universal service” at low rates has proved compelling for businesses that have been forced to offer free shipping to their e-commerce customers. In the past few years, though, FedEx, Amazon, and UPS have reengineered their networks to handle more last-mile deliveries. In their view, it made little sense to fund their networks and pay USPS at the same time when they could make last-mile deliveries work on their own. 

FedEx, for example, has shifted millions of shipments formerly tendered to USPS and plans to self-handle all of those parcels by the end of 2020.

In her final conference call as postmaster general in November to discuss USPS’ financial results, Brennan did not address the potential for privatization, noting instead that the agency’s current “value proposition” would appeal to new and current customers.