ILLUSTRATION BY EMILY SCHERER / GETTY IMAGES
The post office can’t catch a break. Over the summer, operational changes implemented by the U.S. Postal Service’s new postmaster general raised concerns about mail delays. This prompted congressional investigations, lawsuits, a lot of political rhetoric, and even more public worry about whether the disruptions pose a threat to what will likely be the most mail-reliant election in history.
But the Postal Service isn’t struggling merely because of one new postmaster general’s changes — decades of events out of its control have positioned the agency to be particularly vulnerable when crisis struck.
2020 has seen little but crisis. COVID-19 changed a lot of things about everyday life, including how Americans use the post office. Between March and July, the volume of first-class mail like letters, bills and legal documents dropped off a cliff as businesses sought to cut expenses. At the same time, people isolating at home started ordering necessities (and non-necessities) online at a staggering rate. While overall mail volume was lower during the spring and summer compared to the same time last year, the volume of packages surged. In June, 71 percent more packaging was sent than in the year prior.
“We are at holiday levels of mail,” said one mailcarrier, who asked not to be named because USPS employees have been advised not to speak to the media. “Everybody is stuck at home and they’re ordering online, either because they can’t leave the house or the local merchant isn’t open. I personally deliver several hundred Amazon packages a day.”
That was the state of the USPS right as its new postmaster general started implementing sweeping changes. But the Postal Service has been facing challenges for years, many of which stem from the idiosyncrasies of being one of the nation’s oldest institutions.
The USPS has come a long way since the early 20th century, but some of its founding principles remain.
Universal History Archive / Universal Images Group via Getty Images
The Postal Service has existed in some form or another since 1775, and it has always played a role in politics. But it was not originally conceived as a business. Instead, its founders wanted to make an organization that could facilitate democracy, allowing constituents to communicate with and keep tabs on elected officials, according to Christy Pottroff, a literature professor at Boston College who researches the earliest days of the Postal Service. That means much of the original scaffolding of the institution — parts of which are still in place today — doesn’t jibe with more modern expectations for the service to turn a profit.
“If I wanted to send a letter to you in 1815, it would be super expensive,” Pottroff said “But if I wanted to forward a newspaper to you, it would be super cheap. [The Postal Service] was established as a system of spreading the news to as many people as quickly as possible, and communication with elected officials in D.C. It was, in the past, the only way that system of democracy could work.”
This mandate set up the expectation that the post office should serve every American, regardless of class or location. That foundation permeates to this day, even as the institution has faced new financial challenges: An American living in rural Alaska doesn’t have to pay more to send a postcard than someone living in downtown Manhattan. This differs from a private business, which has no obligation to deliver packages to places that aren’t worth the cost of transportation.
But the modern era has complicated the post office’s lofty ideals. In 1970, following widespread wildcat strikes demanding better pay and safer working conditions, the post office was transformed. In exchange for employees’ right to collectively bargain, Congress passed an act that changed the post office from a publicly funded cabinet department to a self-funded, independent agency. Basically, the post office had to function less like a public service and more like a private business, but still uphold its public service obligations — like being beholden to requirements set by Congress and having to serve every American. This worked all right for a few decades, but then the internet happened.
The USPS has a monopoly on sending or carrying flat envelope mail, also known as first-class mail, and on delivering items to physical mailboxes. (It’s actually illegal to slide something through a mailslot if it’s not a piece of paid USPS mail.) This was great for the Postal Service until the internet made handwritten letters, invitations, physical bills, checks, bank statements, etc., all but obsolete. Since its peak in 2001, first-class mail has declined precipitously. That year, more than 103 billion pieces of first-class mail were delivered by the Postal Service. In 2019, that number had dropped to just under 55 billion. This drop in first-class and advertising mail, historically the biggest revenue earners, has hurt the agency’s ability to generate funds.
“That market has gone into a kind of death spiral, and it’s not coming back,” said Richard John, a professor of history at Columbia University and the author of “Spreading the News: The American Postal System from Franklin to Morse.”
Right around the time the internet was eroding the post office’s historical cash cow, Congress enacted a new rule that has caused significant financial hardship for the agency. Unlike any other single federal agency, the post office has since 2006 been required to set aside billions of dollars every year to cover health benefits for future retired employees. These payments amount to about $5 billion a year, but the USPS hasn’t been able to make any payments since 2011, causing the burden to snowball — the agency is now behind on $119.3 billion in payments for the prefunding requirement.
But the internet did come with a silver lining: online shopping. While first-class mail has dropped, the growth of online retailers like Amazon has provided a new opportunity for the Postal Service. It doesn’t have a monopoly over package delivery like it does with letters, so it has to compete with private shippers like UPS and FedEx. But it does have a centuries-old network that reaches every resident in the country. This allows the USPS to negotiate contracts with shippers and retailers to provide last-mile service: delivering packages to addresses that wouldn’t be worth a FedEx trip, but that the post office has to visit anyway.
That last-mile service has helped prop up the agency. A 2018 report from a Trump task force found that from 2013 through 2018, the USPS earned enough revenue to cover its costs … if you don’t include the prefunding requirement.
In 2017, for example, the USPS generated $69.7 billion in total revenue, enough to cover its operating expenses of $68.2 billion, but not to cover the roughly $5 billion in retiree benefits contributions it should have made that year, or chip away at the debt created by not making those payments for most of the decade. As a result, at the end of the 2017 fiscal year, the USPS reported a net loss of $2.7 billion.
That’s why Trump’s claims that the Postal Service is losing money because of last-mile delivery don’t hold water. But it does emphasize how crippling that prefunding requirement has been for the service. And that has left it open to criticism that it needs to reform its operations in order to be steady going forward.
Packages have helped keep the USPS afloat, even as President Trump has complained about package rates.
Alexi Rosenfeld / Getty Images
Enter Louis DeJoy. More than a decade of financial losses and a shifting marketplace provided the perfect setting for a new postmaster general with a successful career in the private sector to start overhauling the system in the name of efficiency and innovation. And when you mix DeJoy’s interest in overhauling the agency’s policies with a global pandemic and a looming election, you’ve got the perfect recipe for turning the country’s most popular government institution into a political lightning rod.
“Right now, at this moment, there are really strange forces converging to screw everything up,” said Richard Kielbowicz, a communications professor at the University of Washington. “Losing first-class mail, where the postal service made most of its money, has been a problem for the last 25 years. But that’s in the background and complicating it is this requirement to prepay retirement benefits, and then on top of that you add that Trump doesn’t like Amazon, and then layered on top of all of that is voting by mail.”
The Postal Service’s increasing dependence on package delivery to earn revenue makes it a prime target for Trump. He already threatened to withhold federal pandemic aid unless the USPS quadrupled the rates it charges for last-mile delivery, a proposition that could make it impossible for the post office to compete. If the USPS didn’t offer competitive rates for that delivery, it wouldn’t take long for other delivery companies — or Amazon itself, which already provides its own door-to-door delivery in many areas — to take over all but the most remote deliveries. These very tensions came to light in a trove of internal USPS documents made public last week.
In the short term, the worst-case scenario will be that the mail is slightly delayed, though not to the point that a vote-by-mail election is rendered impossible (this is why experts recommend requesting and returning your ballot as early as possible). A federal judge has blocked the changes DeJoy implemented that slowed the mail. But even if that injunction gets thrown out by the Supreme Court, some delays shouldn’t prevent a mail-in election from otherwise running smoothly. In fact, in a legal brief filed in response to a lawsuit seeking a court order to guarantee sufficient funding for the general election, the Postal Service pointed out that “… even if every registered voter in the United States used a mail-in ballot in the 2020 Election, those ballots would represent only a fraction of the total mailpieces that the USPS processes each day, on average, and would pale in comparison to spikes in mail volume that the USPS handles every winter holiday season.”
But long term, the weaknesses of the Postal Service will remain, regardless of who wins the election. Even if there’s a new president in the White House next year, the USPS will face the same shaky ground it did at the beginning of the year. If you care about the post office now, you’ll likely need to keep caring about it for months — or years — to come.
