December 12, 2019 at 5:00 am ET
This year’s holiday shopping season is the shortest possible — there are just 25 days between Thanksgiving and Christmas Day to purchase the clothes, toys, electronics, decorations and more for holiday celebrations and gifts. This holiday shopping season is six days shorter than last year’s.
This shorter season has also created a significant time crunch for the U.S. Postal Service to deliver packages to the 159 million addresses across America. USPS delivers more packages to American homes than any other shipper. This year USPS expects to deliver 800 million packages over the holiday season. Between December 16 and 21 alone, USPS expects to reach peak volume and deliver more than 28 million packages each day.
2019’s holiday shopping is off to a record start, but it would be a lot harder to achieve this success without USPS. USPS’ package delivery service is a main support beam in America’s economic infrastructure, and all the more so since the advent of online retail, which has grown explosively and permanently transformed commerce. Millions of jobs throughout the U.S. economy and billions of dollars in economic growth depend on continued access to USPS’ affordable, reliable package deliveries.
Private carriers, which surcharge for deliveries in more than half the ZIP codes in the country, are frankly not a viable alternative for many Americans living in rural communities or for the businesses that depend on USPS. USPS’ competitive prices keep shipping costs reasonable and keep customers happy. And contrary to false criticisms, package delivery is highly profitable for USPS.
Taxpayers do not subsidize USPS. Its operations are paid for by the postage charged for delivery of mail and parcels — including those holiday packages and the billions of other packages shipped throughout the year. Every USPS package delivery is required by law to cover its own costs and a fair share of USPS’s overhead. Letter mail delivery does not subsidize the affordable rates for package delivery offered to retail businesses. On the contrary, revenue from package delivery exceeded the costs of the service by $7.6 billion in 2018. Package delivery’s profitability actually helps defray other USPS costs, including letter delivery. Package delivery service is by far the brightest spot in USPS’s finances; it’s keeping the agency in business.
Privatizing USPS or artificially hiking the rates it charges for package delivery would be detrimental for USPS and for American businesses and consumers, especially those living in small towns and rural communities. These actions would hurt economic growth and the growth of the online retail industry. They would hurt small businesses and large retailers alike.
These actions also would not improve USPS’ financial situation. They would pose a greater threat to its solvency while benefiting private carriers. Freed from the competitive pressure of lower cost USPS delivery, private companies would be able to charge American consumers much more. One analysis estimated private package delivery companies stand to gain $15 billion in higher revenues if the government forced USPS to artificially increase the prices it charges for package delivery rather than price based on the competitive market.
USPS has a unique opportunity now as it looks for a new postmaster general. It’s an important role, overseeing a massive delivery network that connects millions of American consumers and businesses and helps to drive the booming e-commerce economy. Whomever is selected will be charged with continuing to support and sustain reliable, affordable postal package delivery services for all Americans.
Every second 2,760 parcels are shipped around the world. During the holiday season, some of those packages were purchased by the 142.2 million Americans who shopped online between Thanksgiving and Cyber Monday. Other parcels are special gifts for loved ones or care packages for troops stationed overseas. The holidays are a time when the U.S. Postal Service is at its best: delivering packages, making connections between loved ones and spreading good cheer across the country.
John M. McHugh is a former secretary of the U.S. Army and member of the U.S. House of Representatives representing upstate New York; he serves as chairman of the Package Coalition.
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