And Then There Were None…

July 13, 2017


We have reported before about the governance vacuum at the Postal Service. With the lack of action by the Senate, the usual nine Presidentially-appointed USPS Governors dwindled to only one at the beginning of December 2016, and there have been none since Governor Bilbray’s term ended then. Following the election, we await new appointees by the Administration.  Here we publish with permission an article on the subject. We believe that filling out the Board of Governors of the USPS is the most important “postal reform” that can be done at this time.

Op-Ed by Michael Plunkett, President & CEO, Association for Postal Commerce

By any standard, the United States Postal Service (USPS) is a remarkable institution. Its origins predate the founding of the republic, its mission is codified in the Constitution, and it survives despite the continuous introduction of numerous technological substitutes believed to herald its demise. Not only does it survive, it is the linchpin of an industry that employs 7.5 million Americans and accounts for $1.4 trillion in revenue; 4.6% of US Gross Domestic Product. At a time when much of the public is disillusioned with the performance of its government institutions, the USPS is consistently rated highly by its customers

Yet at a time when the USPS faces numerous challenges and increasing competitive pressures, its management finds itself saddled with a governance handicap that is threatening its ability to continue to “bind the nation together”. In December 2016, the term of the last remaining presidentially appointed USPS Governor expired. In the six months since, the USPS’ Board of Governors – which ought to include nine presidential appointees – has consisted solely of Postmaster General (PMG) Megan Brennan and Deputy PMG Ronald Stroman. While USPS has admirably kept the trains running – by dint of delegated authority and fortunate continuity among senior management – this is not a sustainable state of affairs, and cracks are beginning to show.

The Board of Governors was created with the 1970 Postal Reorganization Act with the intent of performing an oversight function similar to that of a Board of Directors in a private sector enterprise. This addition – along with the elimination of patronage appointments and introduction of collective bargaining – was a critical component of the Act’s intent to create a more business-like entity than the Post Office Department. And for the most part it worked. Sure, the Governors were often politically connected loyalists with limited business experience, but they acted as an important check on USPS management, a role that is increasingly necessary now that the PMG position is the province of career USPS management. Prior to the appointment of Bill Henderson in 1998, PMGs were most often recruited from the private sector with Bill Bolger being the sole exception.

Not only are the Governors important to the ongoing governance of the USPS, there are certain functions that cannot be delegated to USPS management under the Postal Accountability and Enhancement Act (PAEA). Among these are the appointment of a new PMG and the institution of price increases. With postal reform looking increasingly less likely and the Commission’s ten-year review unlikely to be concluded during the 2017 calendar year, USPS should have the ability to increase prices subject to the limitations contained in PAEA. While PostCom has publicly challenged the severity of the balance sheet challenges faced by USPS, we do not contend it can succeed without any authority to raise prices.  Indeed, we recognize that the Postal Service’s ability to generate revenue through price changes is necessary to preserve rational pricing relationships and to ensure the financial stability of the USPS. But as things stand today, the USPS will not have the necessary authority to implement any price increase.

In the coming months, the Postal Service will be considering significant capital investments in vehicles, negotiating labor agreements, and launching technology enabled product features that will shape its future for years to come. Simultaneously, Congress is considering reform legislation, and the Postal Regulatory Commission is in the midst of a comprehensive evaluation of the existing regulatory structure. It is incomprehensible that in this environment the USPS Governors bench is empty. The Postal Service is too important to the public, to the mailing industry, and to the economy for this absurd state of affairs to persist. It is incumbent on the President to appoint – and on the Senate to confirm – qualified men and women to help guide the USPS and to ensure its future.