The U.S. Postal Service (USPS) is a $69.5 billion revenue enterprise as of the end of its Fiscal Year 2017. It has over 31,000 retail offices, one of the largest civilian vehicle fleets with over 227,000 vehicles, it processed nearly 154 billion pieces of mail in FY2017 (handling 47% of the world’s mail volume), and it is at the center of a $1.4 trillion mailing industry that employs more than 7.5 million people.
Yet with all its strengths, the USPS currently lacks something that many successful private companies of its size could not do without. It lacks a Board of Directors, or – in the USPS’ case – a “Board of Governors.” The last USPS Governor left that position over a year ago, leaving the USPS with vacancies in all nine of the Presidentially-nominated and Senate-confirmed Governor seats.
But you may have noticed (if you watch these sorts of things), that every month a USPS Board of Governors (BOG) meeting continues to be held. As these meetings are open to the public, those who have continued to attend to watch these proceedings have found themselves observing the odd spectacle that has been occurring each month since the last Governor left. At a good-sized conference table in a good-sized room, only the Postmaster General and the Deputy Postmaster General remain on the Board. These two positions are part of the permanent USPS Board of Governors, which includes 11 positions in all, nine of which are now vacant. The PMG and DPMG, while members of the Board, can’t carry out many of the activities the law authorizes the Board to do.
The remaining members of the USPS Board in 2014 saw that the quorum necessary for it to function was likely to be lost when the next Governor’s term expired, and with no new confirmations for Governors in sight, it established the “Temporary Emergency Committee” (TEC) to allow the Board to continue to operate, delegating the remaining TEC with certain authority to act.
What Do the Governors Do?
The USPS Board of Governors was written into law as part of the 1970 Postal Reorganization Act (PRA) and was designed in part to help the USPS be more businesslike and less politicized than it had been prior to that time. The Board is made of up nine Presidentially-nominated and Senate-confirmed Governors, with no more than five from the same political party, acts independently from the US Executive Branch, and each Governor serves a fixed term of seven years. Governors receive $30,000 in annual salary and up to $300 per diem per day up to 42 days per year. The Board has one full-time staff person and generally meets once a month.
Under US law, the USPS Board of Governors are responsible for ensuring the USPS carries out its mission, including responsibilities such as appointing, determining compensation, terms of service and removal of the Postmaster General; determining compensation of the Deputy Postmaster General; establishing rates and classes for Competitive Services products, authorizing rate/fee changes for Market Dominant products; authorizing requests to the Postal Regulatory Commission (PRC) to add, remove, or re-classify products; appointing/removing the Inspector General; transmission of the Inspector General’s semi-annual report to Congress; selection of firm to conduct required USPS financial audits, and more.
Qualifications for Governor positions were updated as part of the Postal Accountability and Enhancement Act (PAEA) in 2006 and include demonstrated management ability or direct experience in the field of public service, law, or accounting; and at least four or more Governors must have experience managing organizations of at least 50,000 people. As with many legislative directives, however, there are ways exceptions can be made.
Already Feeling the Pain
The USPS and the mailing industry are already starting to feel the pain of what can happen without the USPS having a Board of Governors in place. A case in point is the fact that the USPS can’t put forward its request to the PRC to implement its promotions/incentives for 2018 without approval from its Board of Governors, and that authority can’t be delegated to the TEC.
Mailers who have become used to enjoying additional postage discounts by participating in the USPS’ promotions now find themselves with a great deal of uncertainty for their 2018 postage budgets. If the USPS does not get a Board of Governors in place in sufficient time for it to put the 2018 promotions in place, it is like a double postage increase for many mailers – both the CPI-cap annual postage increase that will take effect in January 2018, as well as loss of the promotions discounts for 2018. At a time when mail volumes are again seeing some decline, a postage increase of this type may further depress volume, perpetuating a negative spiral for the USPS and the industry.
There are other significant impacts on the horizon due to the lack of Governors as well. It remains to be seen whether there will be any legal opposition to the recent price increase request filed by the USPS and approved by the PRC for a CPI-capped increase to take effect in January 2018. Although the last USPS Governor approved the request before he left his position, there are many that question whether a Dec 2016 approval by one Governor is sufficient legal grounds for the USPS to put forth a January 2018 price increase. And even if this specific price increase is not legally challenged, it is certain to be the last such increase the USPS could move forward lacking Governors.
And what happens when the PRC completes its 10-year review of the rate structure, which is expected to occur before the end of this calendar year? If the PRC recommends changes to the rate structure that the USPS then would need to implement, can it legally do so without a Board in place?
An End in Sight?
After some years since the last Presidential nomination was put forth (which then was opposed in the Senate), on October 26, 2017, the President nominated three candidates for the USPS Board of Governors. They include: Calvin R. Tucker (chairman of the Philadelphia Black Republican Council and President & CEO of Eagles Capital Advisors); Robert M. Duncan (17th chairman of the President’s Commission on White House Fellowships, and former chair of the Republican National Committee); and David C. Williams (former USPS Inspector General and previously IG for five federal agencies).
This simply marks the first public step in the process, however, with much still to go before any of the three could be successfully appointed.
The appointment process for becoming a USPS Governor includes nomination sent by the White House to the Senate with significant vetting, interviews, FBI/OGE investigation and more done prior to the nomination. Candidates must provide years of tax information as well as responding to policy questions. Confirmation hearings are held at the Senate Committee level which then votes and moves successful candidates to the Senate floor for confirmation. If confirmed by the Senate, the candidate is sworn in by the President.
The USPS and industry are waiting with baited breath to see if the Senate will work on confirming candidates before the end of the Congressional session. It is also possible that the Senate could unanimously confirm the candidates without holding hearings, but it would take a leadership effort in the Senate to get that to happen.
Kathleen J. Siviter is president of Postal Consulting Services Inc. (PCSi) and has over 30 years of experience in the postal industry, having worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), National Association of Presort Mailers (NAPM) and a diverse set of clients with interest in the postal industry. She also serves as the Director, Community & Brand Development, for PostalVision 2020 (www.postalvision2020.com), an initiative designed to engage stakeholders in discussions about the future of the American postal system.