We have a new PMG

Yes, at long last, the five presidentially-appointed USPS Governors have selected a new Postmaster General, David Steiner. Part of the reason it took so long was that the Governors apparently couldn’t decide on a PMG from three finalists, so they took the unprecedented step of asking the president who he would choose. And President Trump chose David Steiner, according to The Washington Post.

The mailing industry was taken aback by this selection, mostly because we don’t know much about David Steiner. Many had been rooting for the candidate with rich experience in the leadership of the Postal Service and a major customer association. But it was not to be.

Now people are scrambling to understand the choice and speculating about David Steiner. The fact that he has been on the board of directors of FedEx Corporation since 2009 as an independent director has led to much speculation about a possible agenda to privatize the Postal Service and/or to emphasize packages over mail. His name no longer appears on the FedEx list of directors, so the promise to eliminate that potential conflict of interest seems to have been quickly executed.

On Friday, May 9, FedEx filed an 8-K at the Securities and Exchange Commission announcing Mr. Steiner’s resignation from the board:

SECTION 5. CORPORATE GOVERNANCE AND MANAGEMENT.

Item 5.02.     

Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 9, 2025, following his appointment as United States Postmaster General, David P. Steiner notified FedEx Corporation (“FedEx” or “the Company”) that he was resigning, effective May 9, 2025, from the FedEx Board of Directors.

We wish Mr. Steiner well and look forward to helping him with our perspective as longtime loyal customers of USPS. Listening to and understanding customers is one of the most important ingredients to successful leadership of a corporation or major service agency. At the Postal Service, valuing mail and packages is equally important.

Despite the headlines’ emphasis on Mr. Steiner’s FedEx board membership, most of his hands-on corporate experience was with Waste Management Corporation. Before that, he was a law partner.

In November 2000, after a law career from 1987 to 2000, Mr. Steiner took the post of deputy general counsel for Waste Management. In July 2001, he quickly rose to general counsel and senior vice president, and in April 2003, Mr. Steiner was promoted to chief financial officer. After less than four years with the company, he succeeded A. Maurice Myers as chief executive officer in March 2004 and became president in June 2010.

Mr. Steiner is credited with shifting Waste Management’s focus toward environmental services. He led the acquisition of Republic Services, the second-largest waste disposal company in the United States, in 2008.  Steiner resigned as president in July 2016 and as CEO in November 2016.

The Wall Street Journal gave Mr. Steiner credit for a major turnaround at Waste Management:

He spearheaded a comeback for Waste Management. Some of the company’s top executives in the 1990s falsified financial results. Steiner joined the company as deputy general counsel in 2000 and in less than four years climbed the ranks to become CEO. He streamlined operations, improved the company’s financial performance and safety record, and worked to improve employee morale.

The Journal also pointed out that Mr. Steiner has had his share of good luck:

Steiner calls himself “the walking embodiment of better-lucky-than-good.” That is because in 2000, when he went to work for Waste Management, he turned down a job offer from Enron.

How will Mr. Steiner do at USPS? He’ll need lots of both skill and luck to succeed. Several highly-regarded senior executives from the private sector have met their match at USPS. We believe that’s because USPS comes loaded with many barriers to success that are outside the control of the PMG. It is not as clear-cut an organization to lead as a private sector corporation. The goals and mandates are more varied and at odds with each other than the capitalist objective of maximizing shareholder value.

Mr. Steiner made it clear in his quote in the USPS press release that he favors the current status as an independent establishment of the executive branch, which means he will not seek privatization. He also said he looks forward to working with mailer associations.

The most recent past-PMG, Louis DeJoy, wrote a St. Patrick’s Day letter to Congress listing the many headwinds to success that hampered his Delivering for America plan. An extremely self-confident, successful business leader, Mr. DeJoy had five years to deliver success. After promising profitability early on in the plan, USPS remains stuck on a path of annual $7 billion losses and degraded delivery service.

Mr. Steiner is probably the most accomplished corporate leader to take the reins of USPS. We hope that his track record, along with his embodiment of better-luck-than-good, will help lead USPS out of the wilderness. He will, nevertheless, need lots of help from Congress.

USPS second quarter financials continue trend of annual ~ $7 billion losses

The ex-workers’ compensation loss for the first six months of FY 25 is worse than the plan and last year. We exclude workers’ compensation adjustments because they are not related to USPS performance and are accounting modifications that USPS makes to reflect changes in interest and inflation rates.

A large part of the reason for USPS losses is a continuation of volume declines as operating costs relentlessly grow. After a short burst of growth in volume and revenue due to the November elections, the Postal Service is back on the negative track.

Until the Postal Regulatory Commission changes its rate rules, declining mail volume automatically means rates going up higher than inflation. Looking way ahead to July next year, the add-on is around 2.5%, higher than this year’s 2.15%.

President has five Governor positions to fill

Despite the recent decision by the Governors to ask President Trump who he would like as PMG, they have the sole authority to choose the head of the agency and to change rates and services. There are currently five USPS Governors, with one in his holdover year until early December.

With nine positions, this gives President Trump the authority to nominate five new Governors, which could play a large role in shaping the future of the agency. He has already announced his intention to nominate Anthony Lomangino, who has waste management in common with the new PMG. As Newsweek reported: “Lomangino has been ‘involved’ in multiple recycling and waste management companies in Florida, including Southern Waste Systems and LGL Recycling, according to a report by E&E News by Politico.”