Dec. 6 2010 05:36 PM

You've all heard mail volume and revenues are both in rapid decline at the USPS. Customers are switching from traditional mail to paperless email and marketing communications in droves. That, combined with an abysmal economy, has placed the USPS in a quandary. If UPS or FedEx experienced similar issues, their CEOs would implement changes and solutions immediately. Not the USPS. Unfortunately the USPS's CEO is, essentially, the US Government and any attempts to run its operations sensibly are decried and fought against by powerful political people creating a quagmire that dooms the USPS to failure. This situation places its leaders in the unenviable position of scrambling to combat changing times with little ability to enact change. Proposals to end Saturday delivery, consolidate post offices and restructure staff are being considered to cut costs, but there is one idea that will help beyond any other; untie the hands of the USPS!

Robert F. Rider, Chairman of the Postal Service's Board of Governors, stated in the recent proposal to increase rates, "We simply don't have the basic tools necessary to operate in a modern business-like manner" and "We will continue to manage this institution with the 30-year-old laws that govern us, but it's like trying to listen to a CD on an 8-track player."

Sen. Susan Collins (R-Maine) helped author the Postal Reform Act of 2006 and has recently expressed outrage by the current USPS proposals to increase rates by four to six percent, and one class of service by as much as 23%. The Senator states, "These rate hikes are likely to drive away customers, hurt a wide array of businesses and cause customers to seek cheaper digital alternatives, like email." Is she kidding or just clueless?

What the Senator doesn't know is every January, like clockwork, UPS and FedEx increase their customers' rates by about six percent or more, and that's at least twice as often as the USPS. In addition to annual increases, they routinely add new fees as a way to generate additional revenue and this adds billions to the already robust coffers of both companies. These companies understand what it takes to compete and stay afloat. There's no red ink there.

I have lived through numerous UPS and FedEx increases, and each time I'm amazed at their customers' loyalty. The same will hold true for the USPS. Customers will stick with them because there's no competition for what they do best. Those that are switching to electronic means will do so at any price.

As fewer people send mail, it is essential to increase the rates for the people who do and the USPS should be free to set its own pricing and provide new services. This is a basic model for any organization that wants to survive. With its hands untied, the USPS could become the desperately needed third player in the package and urgent letter delivery arena and offer:

Improved/competitive tracking capabilities
Competitive parcel pricing Incentives to workers
Volume discounts
Flexible agreements
Superior and more efficient residential delivery

Dan Gooley has worked at Pitney Bowes in NY/NJ for two decades. He is a passionate mail and shipping industry advisor who routinely shows his customers how to save money utilizing the USPS. His comment: "As much as I hate to see rates increase, the [USPS] needs to be able to run [its] own business. With volumes down as significantly as they are, in order for the [USPS] to keep the service levels that we have come to expect, it needs to be able to adjust rates to cover cost. Which would you rather see: higher rates or deteriorating service?"

There are numerous solutions to fixing the USPS problems but first we need to Untie the hands of the USPS! Their ability to move at the "Speed of Business" is purposefully prevented by those that rule over them. Isn't it time the US government get out of the way?

Jim LeRose, "The Freight Spend Assassin," is Principal of Agile NYC Metro, President of (a shippers savings club) and has been a transportation industry consultant for 25 years. His clients have saved millions on transportation costs. Contact jim.lerose@agilenetworkcom, or 888-214-1763.