A recent tweet from President Trump drew attention to a years-long debate over what to do about the post office.
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
While this salvo may be more driven by the president’s long-standing beef with Amazon CEO Jeff Bezos, it nevertheless points to some important truths.
Citigroup analysis found that each Amazon package delivered costs the USPS (and, by extension, taxpayers) $1.46 in a setup that generates record profits for the online marketplace, extra working hours for postal employees, and inflated sales numbers for the federal enterprise, which has a monopoly on last-mile delivery.
Furthermore, the USPS — which is supposed to be a self-supporting business entity — lost over $50 billion between 2007 and 2016 and stands to lose more as postal mail becomes less and less prevalent in an increasingly digitized market.
In fact, the USPS currently has over $121 billion in debt and unfunded liabilities.
This means that the post office, like so many other endeavors of the federal government, will likely continue hemorrhaging money until it eventually requires a taxpayer-funded bailout to keep the lights on and the trucks rolling. Such is business as usual for state-owned enterprises.
And while the president suggests jacking up shipping prices as a way to offset the post office’s fiscal woes, others have been suggested resurrecting the old practice of postal banking to help the service remain solvent while driving payday lenders out of the financial market. But there’s a better way to address the problems: privatization.
Other countries, like the United Kingdom, Germany, and the Netherlands, despite state-sponsored interference in other sectors of their respective economies, have realized that in the age of email and social media, competition among private package services drives better services and lower price through innovation and that the government doesn’t need to be involved in the parcel delivery service any more.
It’s time we realized the same.