The United States Postal Service: Modernization, Budgeting and Corporate Partnerships

Matthew Bellittiere, MPA Project Proposal· Advisor - Prof. Laurie Buonanno

The United States Postal Service (USPS) is the only federal government entity that has constant contact with every corner of the US and its citizens on a daily basis. Yet it is not often that Americans stop to think about how the USPS reflects changes in our expectations as to how governmental entities should operate in the 21st Century. Indeed, the USPS has undergonemajor changes over the last decade - transforming itself from its traditional role of delivering letters and only a few parcels, to delivering letters, many more parcels and a multitude of other services. The USPS’s struggle to survive and adapt to the contemporary delivery landscape can teach us much about how traditional government “machine” bureaucracies adapt to the new “hollow state” of private-public partnerships (P3s). How does a prototypical government bureaucracy transform itself?

The purpose of the study is to chart how the USPS has forged partnerships with for-profit rival delivery companies and the nation’s largest online retailer, and the implications these partnership hold for the USPS’s future economic viability and the role of P3s in new public governance. Can the USPS become a leaner, more flexible, and more responsive to the delivery needs of postmodern America?

Background/Introduction

References

Methodology

The USPS employs approximately 617,000 workers, making it the third-largest civilian employer in the United States behind the federal government and Wal-Mart. The USPS operates 31,000 post offices and locations in the U.S., and delivers 155 billion pieces of mail annually (USPS website).

The UPS is a “quasi-governmental agency” (supported by the government, but managed privately). It is an independent establishment of the executive branch of the US federal government, controlled by the Postmaster General and the Postal Regulatory Commission (PRC), comprised of commissioners appointed by the POTUS and confirmed by the US Senate. The literature on quasi-governmental agencies is reviewed in the context of their characteristics and relationship with Congress, the President, and its commissioners.

That the USPS is a quasi-governmental agency is particularly interesting to public administrators because it represents an opportunity to study extensive government control (president appointment and senatorial confirmation of the PRC and the postmaster) coupled with the dictate to be managed as a private entity. Thus, the USPS represents an opportunity to test the value of the New Public Management (NPM) theory of public administration. Particularly important from the NPM perspective is the fact that the USPS is constantly under fire by the US Congress over its budgets. Budget projections, falling letter delivery numbers coupled with increases in pension and healthcare costs are documented . The table, below, shows (September 2014), USPS liabilities exceed assets by approximately $45 billion. The modernization of the USPS, has occurred because of the inability for the USPS to stay profitable under a traditional view of public administration due to rising costs associated with pension liabilities, an aging workforce that is reducing work place efficiency, an aging USPS fleet of vehicles, and competition from for profit delivery companies. The USPS has responded to criticisms of its “old government bureaucratic ways” by forging partnerships with companies that need its delivery services. Most interesting has been it partnership with Amazon (the nation’s largest online retailer) and its rival delivery companies – FedEx and UPS.

Literature Review

Stevens, L. (2014). For FedEx and UPS, a Cheaper Route: the Post Office, Article. Wall Street Journal - Eastern Edition, pp. B1-B2.

Waxer, C. (2014). MODERNIZING THE Mail. (Cover story). Computerworld Digital Magazine, 1(5), 12-19.

USPS (nd) “About USPS. United States Postal Service website.

USPS (2015). https://about.usps.com/who-we-are/financials/integrated-financial-plans/fy2015.pdf

The old USPS

The new USPS?

Sampling

Sampling is only relevant in this study insomuch as I plan to attempt to conduct open-ended interviews with individuals at the USPS, Amazon, UPS, and FedEx who are responsible for managing their partnerships once I have completed the other aspects of my data collection.

Research Design

It is difficult to pinpoint a quantitative, qualitative, or a mix of both at this early stage of the process. My analysis will take place in phases as follows:

Phase 1: Analyze the USPS’s budget in terms of the present and fu-ture costs identified in the literature review (pension liabilities, aging fleet, etc.)

Phase 2: Analyze USPS budget projections based on partnerships with Amazon, UPS, and FedEx (heretofore, “partners”).

Phase 3: Analyze and map the contractual agreements between the USPS and its partners based on secondary sources (USPS, etc.).

Phase 4: Interview USPS officials and partners with respect to the na-ture of the P3. These will be semi-structured interviews designed to solicit opinions as to how the partnerships are structured, ease of im-plementation (or lack thereof), and other information that can only be gleaned through interviewing.