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A Stunning Reversal
Burrus Update #05-06, April 5, 2006
In a stunning reversal from the dire warnings that “diminished rate of mail volume growth” was certain without an overhaul of the USPS business model, Postmaster General Potter announced to the National Postal Forum on April 3 that “the forecast for the Postal Service and the mailing industry is very good.”
In congressional hearings over the past three years, witness after witness from the postal community has asserted that only “reform” could save the USPS from imminent demise. David M. Walker, Comptroller General of the United States, began each appearance with theatrical demonstrations designed to show that the advent of cell phones and e-mail signaled the death of hard-copy communication and that “reform” was essential for a healthy future for the Postal Service.
PMG Potter repeatedly warned that a decline in mail volume threatened the existence of the USPS. Speaking at the first public hearing of the President’s Commission on the U.S. Postal Service on Jan. 8, 2003, he said, “The potential significant diversion of letters to electronic medium challenges our business model.”
We disagreed. It was the view of the American Postal Workers Union that the volume downturn in 2001, 2002, and 2003 were aberrations caused by 9/11, the anthrax attacks, and an economic recession. But this view was ignored in the rush to embrace “reform.”
In testimony before the President’s Commission on the U.S. Postal Service on March 13, 2003, I included the following caution:
“We also take issue in this rebuttal testimony with the contention, made by several witnesses, that the Postal Service’s financial condition is dire and irreversible. This is another area in which colorful rhetoric threatens to replace analysis. Witnesses have repeatedly asserted that the Postal Service is in a ‘death spiral.’ But this contention is based on supposition, not evidence. The evidence is that proper pricing of postal services would again generate operating surpluses, as it did in the mid 1990s. Although the advent of electronic transmissions raises the question whether First-Class Mail will continue to grow, those who predict the rapid demise of First-Class Mail and of the Postal Service are doing so on the basis of conjecture, not analysis.”
Not a single witness joined in this assessment, because it did not fit neatly into their narrow objective — to radically change the United States Postal Service to suit their ends.
The first defector from the dominant view among reform supporters was Luis A. Jimenez, senior vice-president of Pitney Bowes, who presented a paper in 2005 [PDF] offering a different analysis: He asserted that mail as a communication medium is destined to grow well into the future.
But postal management held out as disciples of reform until recently, when the Board of Governors publicly criticized pending postal legislation. In response to angry “reform” proponents who thought USPS management was their ally, postal leaders suggested they had been merely misunderstood. They always had reservations about reform, they said.
To complete this hypocritical circle, the Postmaster General now announces that:
“Mail volume last year reached a new record: 212 billion pieces…. Marketers have found that using the mail, along with the Internet, has resulted in significantly larger orders than if they had relied on Internet advertising alone. The public and the marketplace have spoken loudly.
“The mail works.”
Albeit a bit late, the American Postal Workers welcomes Mr. Potter and the Postal Board of Governors to the world of reason and reality.
William Burrus
President
