The tempo of postal reform has been picking up these days in Washington. More than ever before, key members of Congress now seem to realize that the postal system’s legislative and regulatory framework is in need of a major overhaul.
As a result, our industry will get more than an earful about things that should or should not be made part of a new law. To the novice, the many issues underlying the reform debate may seem incredibly complex, but they’re not. They’re interrelated, and based on a few simple rules.
For instance, if reform is to ensure the survival of cost-efficient universal mail service, two principles must serve as the foundation of any legislation.
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The first is that the definition of postal service costs must stem from a clear measurement of the cost of resources needed to provide that service at various levels of the postal network.
Just one example: It’s important for policymakers (and the USPS) to be able to discern unambiguously the costs of simple mail delivery as opposed to the expenses associated with delivery combined with other upstream services, such as mail collection, initial processing, transportation and downstream sorting.
A bottom-up approach to postal costing is vital to ensure rational pricing, stimulation of new product development, accurate measurement of service performance, wise investment in information technology tools and internal management of postal resources.
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The second principle (and perhaps the more important) is that Congress must give the USPS the authority to eliminate whatever wasteful redundancies may occur in the postal network over time from changes in mailers’ behavior or marketplace demands.
If Congress won’t grant it such outright control, then it must come up with an alternative mechanism to help the postal service improve cost efficiency.
These are essentials. If either one is absent from any proposal brought before Congress, the whole exercise won’t be worthwhile.
Congress needs to understand this. And it’s up to us to ensure that this important message is not misunderstood or overlooked.
GENE A. DEL POLITO is president of the Association for Postal Commerce (PostCom) in Arlington, VA.
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