Chris Edwards
Chris Edwards
“President-elect Donald Trump has expressed a keen interest in privatizing the US Postal Service [USPS] in recent weeks,” reports the Washington Post. The article discusses Trump’s long-standing complaints about the postal agency and possible reforms in the spirit of his Department of Government Efficiency (DOGE).
The article mentions hurdles to privatization, but ongoing declines in letter volume mean that the status quo is not an option. First-class mail has plunged from 104 billion pieces in 2000 to 46 billion by 2023. On a per-capita basis, 2023’s mail volume was just 37 percent of 2000’s. Congress provides the USPS with a legal monopoly over mail, but mail is a dying industry.
Few people today send personal letters; banking and bill-paying have gone online, and the internet has killed postcards, invitation notes, and other types of mail. Few young people use mail, so demography is doom for an unrestructured USPS.
The USPS has expanded into package delivery, but we already have FedEx, UPS, and Amazon competing in that industry. As a government-owned agency, USPS expansion into packages or other competitive industries is problematic because it has tax and regulatory advantages over private firms.
A Trump task force in his first term found that the USPS’s business model “is unsustainable and must be fundamentally changed.” The needed change is to privatize the postal system, a reform that European countries, such as Germany, have successfully pursued.
Privatization would give the USPS the flexibility it needs to survive free from congressional micromanagement. The first Trump administration was right that a “privatized Postal Service would have a substantially lower cost structure, be able to adapt to changing customer needs and make business decisions free from political interference, and have access to private capital markets to fund operational improvements without burdening taxpayers.”
You can see the cost structure problem with USPS retail locations. » Read More
https://www.cato.org/blog/will-trump-privatize-usps