Two things can be true at the same time: The United States Postal Service is an invaluable public service crucial to the transportation of pharmaceuticals, official documents and much else, and it’s also in an unsustainable position and in need of a turnaround.

 

Many people are aware of the 2006 law requiring the USPS to pre-fund its pension liabilities, which turned the service from a profit-generating operation to one with massive losses. But the multi-decade degradation of USPS’s Package operation and its unjustifiable subsidy of junk mail are less well studied.

 

In this piece, we explore net income trends at the Postal Service, dive into the evolving volume and revenue profile of its Package operations and explore the implications of significant operational changes for UPS, FedEx and Amazon.

 

Louis DeJoy is the first postmaster general since the 1980s to come into the job with significant private-sector transportation industry experience. From 1982 to 2014, DeJoy was the CEO of New Breed Logistics, a contract logistics provider acquired by XPO. He may be the right type of person — as opposed to the career postal employees who have served as postmaster generals in recent decades — to execute the operational transformation the Postal Service needs.

 

We look forward to a rightsized Postal Service that rebuilds linehaul density, prices last-mile delivery appropriately and continues moving the enormous volumes of physical documents that are still necessary.

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