Guest Column: Postal Service can compete, but reps must act

Farm Forum

A column by Gerald Krueger on Sept. 2 accurately called the U.S. Postal Service “one of the strongest stalwarts of our society.”

But the column proceeded to talk about the Postal Service’s financial plight without explaining its cause, contended that the USPS can’t compete with other delivery firms, and said that post offices focus overly on being trendy and glitzy.

With the USPS so critical in vast and heavily rural South Dakota, your readers deserve straight talk about the actual situation at the Postal Service — the challenges and the opportunities. Here are some key points.

First, there is no financial crisis at the Postal Service in any normal business sense, despite what the headlines suggest. So far this year, it is profitable by $330 million delivering the mail. You read that correctly.

The good financial performance for fiscal 2013 began in the first quarter with an operating profit of $100 million — $17.7 billion in revenue from selling stamps and $17.6 billion spent to deliver the mail. (The Postal Service gets no taxpayer funding; it earns its money selling stamps.) That continued with $660 million in black ink in the recent third quarter report.

This is outstanding in a weak economy. It’s occurring in large measure because while the Internet leads more people to pay bills online, it also spurs them to order goods online, and those package deliveries are increasing faster than first-class mail is declining.

But what about the red ink you’ve heard about? There is red ink, but it doesn’t result from delivering mail to homes and businesses in Aberdeen or anywhere else. Rather, it stems from congressional interference.

In 2006, Congress mandated that the Postal Service pre-fund future retiree health benefits. No other public or private entity is required to pre-fund for even one year; the Postal Service has to pre-fund for the next 75 years, and pay it all within a decade, at an annual cost of $5.5 billion.

That unfair burden accounts for 100 percent of this year’s red ink — and then some.

Lawmakers should address the pre-funding mess they created. Instead, some in Congress — motivated by zealotry or a lack of facts — want to compound their error by depriving South Dakotans and their businesses of services you rely on. They aim to take away door-to-door delivery and force people in Aberdeen to traipse around the neighborhood in all kinds of weather looking for “cluster boxes.” They want to eliminate Saturday mail delivery, thereby raising costs for South Dakota’s small businesses (with 203,857 employees) as they hire expensive private carriers on weekends.

And degrading the network would cause additional harm. A robust, six-day-a-week Postal Service is the centerpiece of a $1.3 trillion mailing industry employing 7.5 million Americans in the private sector, including 32,467 in South Dakota.

South Dakota’s representatives in Washington can reduce service and send the Postal Service on a downward spiral by driving mail (and revenue) away. Or, they can fix the pre-funding fiasco. Your readers can help them choose wisely.

Fredric Rolando is president of the National Association of Letter Carriers in Washington, D.C.