With the likely passage of the Postal Service Reform Act of 2022 - enjoying bipartisan support, we thought it useful to share some insights.After all, the USPS remains the key cog in the wheel of last mile delivery for USA e-commerce orders.
The Senate approved the $107 billion financial overhaul of the U.S. Postal Service allowing further modernization and invest in efficient service. The Postal Service Reform Act passed 79 to 19
Shifting Financial Burden from USPS
Shippers and the general public will likely not see any big changes as a result of this legislation. Delivery to mail boxes and every address to the USA will not be affected. The reform is mostly a way to shift the burden of health care from the USPS (Federal Employees Health Benefits program/ FEHB) to Medicare.
- Critics argue the bill simply shifts the risk to Medicare
- Postal Service unions are supporting the switch to Medicare
- Proponents argue the bill will actually save the government money and/or will have a relatively small impact not the massive Medicare system.
Universal Coverage, Bi-partisan Support for Postal Reform
That the US Postal Service enjoys support of the American public is evidenced with the bipartisan nature of support for this bill.The argument for the post office includes delivery to rural areas and senior citizens with critical delivery of prescription drugs.
Non-reform reform Act?
The main goal of the legislation is to reduce the agency’s deficits byrelieving the USPS of $100 billion of compensation costs. The bill abolishes the mandate that the Post Office pre-fund its health care costs. The rest of the legislation deals with various administrative matters.
Parcels: A Form of Physical Connection in our virtual world
Beyond the universal coverage and delivery of prescription drugs, it has become clear that America supports a sort of democratization of parcel delivery. And when someone asks,“what does America need from a post office in the 21st century,” the answer seems to be low cost accessible parcel delivery for all.
The basic function of the postal office “to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people” has expanded to include last mile delivery for all e-commerce merchants.
Peak Parcel?
Mail volume peaked in 2006 and the question is when will parcel volume peak? E-commerce parcels are the life blood of the Post Office.As the USPS is continues the retooling, there is a threat that their largest customersnamely Amazon, FedEx, and UPS - continue to build volumes and handle low density areas.
Contentious but Essential
Contrary to the bipartisan support of the postal office in general, postal politics has always been a contentious ecosystem of unions and mailers. And private carriers - namely FedEx and UPS -exists as competitors, customers and suppliers to the USPS.
E-commerce last mile Cross Border to the USA and Cross State Borders
Both international e-commerce online sellers and local e-commerce merchants rely almost solely on the USPS. The USPS serves as a neutral party for sellers and direct access via their global direct entry (section 321) , via a postal partner, or via the thousands of local postal outlets.
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