电子商务时代邮政改革的新视野.docx

|T| r INFORMATION TECHNOLOGY Illi & INNOVATION FOUNDATIONA New Vision for Postal Reform in the E-commerce AgeROBERT D. ATKINSON | FEBRUARY 2021Congress should pass Postal Service reform legislation that focuses on two key things: freeing up USPS to make the kinds of reforms it needs to reduce costs, and establishing a Technology Innovation Fund to enable robotic last-mile postal delivery.KEY TAKEAWAYSAbsent significant reform and increased use of technology, USPS's finances will continue to be troubled. The solution is neither privatization nor government subsidies; ifs reform and innovation. Because of continued declines in first class mail and the growth in package volume, Congress and the administration should not require USPS to raise its prices for package delivery. Congress should explicitly encourage USPS to close money-losing post offices and consolidate postal processing facilities to create the most efficient national processing network possible. Congress and USPS should support expanded work sharing in areas such sorting and processing. Neither Congress nor USPS itself should expand the mission of USPS to new, non-postal- related services. The best way to reduce USPS costs would be to automate local delivery of the mail. Robots show promise but need more development. Congress should appropriate $1 billion a year to support a USPS robotics development and adoption fund.Reduce Operational Costs Smartly Without Adversely Impacting ServiceThe only way to make USPS financially sustainable would be to cut costs, increase revenue, or both. Revenue can be increased several ways, such as by hoping package growth continues; and while that is a desirable outcome, it is not likely to be enough to address the challenge. USPS could increase prices of either market dominant or competitive products. The challenge is this could accelerate diversion to other channels of competitors. Revenue could increase if the government simply subsidized USPS. However, while a one-time COVID-19 subsidy is justifiable and desirable (especially as other large industries such as airlines have received help), ongoing subsidies are likely not politically sustainable. And like price increases, subsidies reduce the pressure on USPS to take, and Congress to support, the steps needed to cut costs.Finally, USPS could get into new lines of business, hoping that somehow they could make surplus profits to help offset postal losses. But it is not appropriate for USPS to compete with private businesses outside of postal functions. And even if one accepted that it were, the history of USPS with such efforts suggests the odds of success would be minimal.This leaves cutting costs. There are two principal ways to cut costs: eliminate certain services, and improve efficiency while reducing labor benefits.The risk of cutting services is doing so could lead to a downhill spiral, with mailers and shippers choosing other forms of delivery (e.g.z electronic media or using private carriers for packages), which in turn would lead to fewer revenues and a requirement to cut services even more. At some point, equilibrium might be reached, but likely at a much worse service quality than consumers and mailers enjoy today. As previously discussed, solutions such as going to five day a week delivery run that risk.Increase Efficiency and Work Sharing With the Private SectorCost cutting should focus on improving system productivity, not just USPS productivity. According to the Bureau of Labor Statistics, USPS labor productivity fell by approximately 11 percent from 2010 to 2019.30 (Interestingly, labor productivity for private couriers and messengers fell even more.31) Some of this may be due to difficulties in measuring output; some of it may be due to an inability to cuts costs at the same pace as mail declines. But some of it may be limited investment in research and development (R&D) and capital equipment.There are things USPS could do, especially if Congress gave it the ability to do so, which could cut costs without unduly hurting service.Nonetheless, there are things USPS could do, especially if Congress gave it the ability to do soz which could cut costs without unduly hurting service. As the U.S. Government Accountability Office (GAO) stated, uStatutory requirements, however, limit USPS's ability to make changes in areas such as certain service offerings, pricing, and its employee compensation and benefits/132One place to start is with post offices. According to GAO, USPS operates approximately 34,600 postal retail outlets, with about 36 percent of them being money losers.33 USPS needs to close and sell redundant and underutilized post offices. In places where this would leave communities without adequate service, office stores, grocery stores, or other retailers could provide postal functions (selling stamps, accepting mail, and the like). Indeed, there is no reason office supplyand related stores shouldn't be allowed to open up postal counters, as long as PRC sets the rate in a way that provides USPS with at least some net revenue. While the Postal Service tried to institute a deal such as this with Staples1 postal union workers picketed Staples stores until they pulled out of the program.34 In fact, as GAO noted:At the same time, some minimized this disruption by expanding retail access through alternatives such as Internet sales and partnerships w计h retail businesses such as grocery stores or pharmacies. We reported that these changes either reduced operating and labor costs or improved customer service, in some cases because the partner retail facility stays open longer, or both.35Yetz in the past, when USPS has attempted to close retail facilities, Congress and unions have objected. Congress should explicitly encourage and allow USPS to close money-losing post offices and, where appropriate, work with private-sector companies to provide acceptance services. And whenever postal workers1 unions engage in boycotts or picket against USPS retail partners that take over functions from closed post offices, USPS should not give in to pressure to reopen these post offices.Early in the last decade, USPS undertook a plan to consolidate mail processing facilities called the Network Rationalization Initiative, which achieved only limited success due to stakeholder opposition, including from Congress.36 Just as the e-commerce and package delivery sectors tend to be highly concentrated due to network economies and technologies that enable more scale and lower costs, there are cost-saving opportunities in consolidating mail-processing. Congress should explicitly encourage USPS to consolidate postal processing facilities to create the most efficient overall national processing network.Unless Congress wants to be on the hook for regular bailouts, it is time for it to get out of the way and stop meddling.Processing work does not need to be conducted exclusively by USPS. The Postal Service has had a long-standing program of work sharing, whereby private companies can receive work-share discounts for doing some of the work USPS would otherwise do. For example, some companies presort or drop-ship mail to USPS, thus both reducing the work USPS has to do and saving USPS money. USPS sets price discounts for this work based on the principle of uefficient component pricing/1 according to which work-share discounts are supposed to be set equal to avoided costs. To the extent that companies can do the work more efficiently than USPS, society is better off due to higher overall postal system productivity. In particular, this should be expanded to enable work-share discounts for more of the preparation and sorting for the Postal Service to do the final delivery point sequencing. Congress should support expanded work-sharing in areas such as sorting and processing. At the same time, USPS and PRC should regularly update work-share discounts to fully and accurately reflect the efficiency gains to the network operations.USPS no longer has the time to wait and be blocked from making these kinds of facility rationalizations. Unless Congress wants to be on the hook for regular bailouts, it is time for it to get out of the way and stop meddling.Address Salaries and BenefitsA second way to improve USPS's financial situation is to focus on labor compensation. This can be done without directly cutting compensation. Rather, more can be done to reduce retirement payments, particularly by raising the retirement age at which USPS workers can receive retirement benefits. Postal workers are allowed to retire with full pensions after the age of 57 if they have worked 30 or more years.37 This differs dramatically from Social Security, wherein most individuals are not subject to full benefits until they turn 67. As such, USPS should not pay retirement benefits until workers turn at least 65 or are forced to go on disability. Postal worker unions will obviously oppose this change. But unless reasonable steps such as this are taken, USPS finances will likely continue to be in crisis.In addition, as GAO noted, negotiations between management and labor utake place against the backdrop of binding orb计rotion (and the arbitrators have historically been reluctant to deviate from the status quo), resulting in only incremental changes. We have long supported changing the laws regarding collective bargaining to require that USPS's financial condition be considered in binding arbitration.1,38Congress should give USPS more flexibility to adjust wages to reflect local costs of living. Federal workers on the GS schedule have wages and wage increases adjusted by local costs of living. A federal employee in Washington, D.C. has a much higher cost of living than one living in a small town in Arkansas. However, USPS does not do that. As USPS Office of Inspector General wrote:given the Postal Service's nationally uniform pay scale, regional differences in cost of living affect real wages, and higher real wages are associated with higher productivity. While postal management must negotiate with its labor unions to collectively determine its pay schedules, the negative effects of unequal real wages on productivity is clear.39The report argues that such changes would reduce costs and boost productivity.Stick to the Mail: Keep the Postal Service Out of Commercial Non-Postal Lines of BusinessAs noted above, for many members in Congress adding Postal revenues is politically easier than cutting Postal costs. This is especially true for some on the left who favor expanding the Postal Service because it is not a business.One supposedly easy way to fill USPS coffers would be to let it operate new lines of business unrelated to postal services. A report for the Economic Policy Institutes states that USPS could offer more services to offset the fixed cost of maintaining post offices and daily delivery. Post offices, for example, could offer many printing and other services provided by FedEx Office and The UPS Store, and expand the use of parcel delivery lockers. Likewise, mail carriers could pick up and make deliveries from local stores, including groceries. The Postal Service could provide banking services to low-income communities underserved by financial institutions or high-speed internet access to rural areas.40To be sure, there may be some ways for USPS to bring in additional revenue. But what should be the logic behind the decisions? First, any new business revenue opportunities should build upon USPS's existing advantages, including its network of post offices and delivery routes. Second,new revenue opportunities should be postal related. Third, these opportunities should be low risk and address real unmet market needs. Fourth, the opportunities should generate considerable profits to help USPS make up for current losses.Rural broadband, for example, as the Economic Policy Institute (EPI) argues for, fails on all four grounds: It does not build on any USPS advantages, is not postal related, meets an unmet market need, and is anything but low risk. And if highly specialized and technologically sophisticated broadband companies can't sell broadband in certain rural areas for more than it costs them to provide the service, what makes anyone think USPS could better?For many members in Congress adding Postal revenues is politically easier than cutting Postal costs. This is especially true for some on the left who favor expanding the Postal Service because it is not a business.Many on the left now want USPS to get into the banking business.41 Helping the unbanked would certainly meet a critical public need, but any efforts in this direction would have to be based on careful evidence that this business model would actually workand that appears to be lacking.Banks make money from lending, and if USPS were to get into lending, especially to a population that is on average a higher credit risk, it would increase risks to its financial solvency. Moreover, like broadband, the banking business involves considerable technological and managerial sophistication. There is no more reason to think USPS possesses these capabilities than Citibank could successfully enter the package delivery market.Moreover, getting into the banking busines is not costless. EPI wrote, uAnd offering such serviceseven at a low cost and for the benefit of the communitycan serve to defray some of the post office's fixed overhead costs.M42 But this assumes that there would be no new fixed costs for USPS, when in fact it is likely a considerable share would be new fixed costs (e.g.z setting up software systems to manage the banking functions) and new variable costs (hiring more counter workers to serve as bank tellers). Moreover, this would likely be “fighting the last war/1 as private bank branches are shrinking as more and more people move to online banking and fintech apps on their smart phones. Finally, figuring out an entirely new and unfamiliar business would divert time and attention from management on focusing on their core line of business.The Trump administration's postal reform proposal at least wanted USPS to limit its efforts at gaining new revenue to ubusiness opportunities that will allow it to extract value from its existing assets and business lines.M But some of its proposals were a bit far afield, such as the USPS exploring licensing to private companies the right to deliver directly to residential mailboxes and providing additional government services, such as licenses for hunting and fishing." But ifs not clear how much revenue there is to be had from issuing hunting licenses, especially when that function can and will be provided over people's smartphones through e-government apps.Licensing access to the mailbox to private deliverers would mean an end to the Postal Service as we know it because the result would be private competitors leasing access to the most profitablero