July 26, 2023 •
GCA: The USPS needs a new plan
Delivering for America fails to do as its name promises
A famous general once said, “No plan survives contact with the enemy.” Unfortunately, Postmaster General Louis DeJoy refuses to acknowledge that truism.
When the Delivering for America plan was unveiled 21⁄2 years ago, it received mixed reactions from mailers. No customers were directly consulted during its development, which was a missed opportunity, but it laid out a mixture of attractive and concerning elements.
The GCA strongly supported its commitment to passing postal reform legislation to eliminate the onerous pre-funding mandate for retiree healthcare costs and to ensure six-day mail delivery via an integrated network. GCA was concerned, however, at the plan’s assumption of losing more than 40% of mail volume.
Shortly after its implementation, it became clear that many of the plan’s assumptions were inaccurate. Initially, traditional mail volume and revenue were much stronger than predicted, but estimated package volume increases failed to emerge. More recent analysis from industry economists reveals that the unprecedented twice-a-year stamp price increases and other traditional mail postage have resulted in a precipitous drop in volume. Meanwhile, the USPS failed to capture any package growth in the last quarter, which fundamentally jeopardizes the viability of the plan.
Unfortunately, DeJoy remains set on following the plan without any modification or deviation even though, in what was predicted to be the first break-even year under the plan, the USPS is projected to lose $4-5 billion in FY2023.
He recently appeared at a hearing to examine the plan, which was unfortunately the first hearing in either the House or Senate oversight committees on the plan, and was woefully narrow in scope. DeJoy was the only witness. The health of the customer base is essential to a viable USPS, but appears to be overlooked by Congress, the Postal Regulatory Commission and USPS leadership.
Volume and revenue losses of the magnitude that are emerging will require a change in direction. GCA is working to highlight these challenges and ensure that the benefits of the postal reform law passed last year are not squandered.
A useful step would be a dedicated hearing on the health of the USPS customer base, and we are pursuing that goal at the earliest opportunity. It is imperative that our elected officials and regulatory bodies realize that without mail, there can be no USPS.
Nora Weiser is the executive director of the Greeting Card Association (GCA), and Rafe Morrissey is GCA’s vice president of public affairs.