A robust effort is underway to put the U.S. Postal Service on better financial footing — and to update it to fit a country that sends far fewer letters than it once did. Bipartisan legislation passed earlier this spring took billions of dollars in retirement liabilities off its balance sheet, and Postmaster Louis DeJoy is replacing tens of thousands of aging delivery trucks, increasing revenue with higher postal rates and taking pressure off the system by slowing some delivery times.
It’s true that the Postal Service was on an unsustainable course. But the current plans — especially the slowing of service for many first-class packages, and the increase in fees — fail to take into consideration the role the Postal Service plays in helping small- and medium-size companies compete with the likes of Amazon and Walmart. A fast, reliable and affordable Postal Service is an underrated anti-monopoly tool. It should be evaluated, therefore, not on its financial self-sufficiency but on how well it provides this public good of connecting American consumers with small businesses and independent makers across the country. Funding that lets the Postal Service deliver packages quickly and at a price that small businesses can afford should be considered an investment that helps to ensure that the American economy is not dominated by a handful of behemoth retailers.
Democrats, in particular, have played a leading role drawing attention to the negative impact of monopolistic retailers, so it is especially disappointing that they have not done more to emphasize the positive role the Postal Service can play in leveling the playing field.
The capture of retail by a few giants has been well documented. Amazon was responsible for more than 40 percent of all e-commerce sales in 2021; with just over 7 percent, Walmart is a distant No. 2. Such stores attract business even though consumers worry about their effects on other players in the economy: In 2019, a CNBC survey found that 59 percent of Americans thought Amazon was bad for small businesses.
These companies keep customers happy in part with rapid delivery. The promise of “free” next-day delivery for millions of products is one of the main reasons that roughly 150 million American households pay for the rewards program Amazon “Prime,” and keep renewing it year after year. (Jeff Bezos, the founder of Amazon, owns The Washington Post.)
Meanwhile, Walmart’s use of its 4,700 stores — strategically placed to be within 10 miles of 90 percent of the U.S. population — as fulfillment centers for online sales has been key in its ability to remain a force in e-commerce.
It’s often suggested that the emergency of a handful of dominant middlemen is a natural byproduct of the internet economy. But technology has also made it easier for people to connect with independent makers and small business across the country.
Platforms such as Etsy make it possible for a graphic designer to set up a side business selling T-shirts featuring his or her unique designs. And companies such as Shopify allow a family-run home goods store in Kentucky to set up a high-functioning and affordable virtual storefront, massively expanding their geographic reach; at the end of 2021, more than 2 million businesses relied on Shopify’s e-commerce services. Ebay is the third-largest player in e-commerce, and, like Shopify, it has played a critical role helping individuals and small sellers reach customers without having to rely on Amazon.
Efficient fulfillment of orders remains a challenge, however. Small makers and retailers will never possess the fleets of trucks, state-of-the-art warehouses and other aspects of logistical infrastructure that make it so easy for Amazon and Walmart to offer fast, reliable and relatively low-cost delivery of so many goods. Most small businesses rely instead on the Postal Service. A 2019 survey by the U.S. Postal Service Office of Inspector General found that 70 percent of microbusinesses — firms with fewer than 10 employees — used the Postal Service in the previous six months and a majority used the Postal Service more often than any other shipping service.
Against, this backdrop, the current effort to revitalize the Postal Service has both great strengths and significant flaws. The initiatives to update outmoded IT, buy new trucks, make the post office a desirable place to work and otherwise enhance its operational efficiency are welcome and needed. Reforms that produce a healthier, stronger and more efficient Postal Service can also help reduce just how much consumers must sacrifice if they want to buy from someone other than the giants.
But the proposals to delay some delivery times and increase fees are an obvious step backward. Under the new standards, nearly one-third of all first-class packages could take four to five days to arrive and still be considered “on-time.”
The post office will never match the speed of Amazon Prime — nor should it be expected to. But the difference between waiting an extra day for a package, and waiting two or three extra days, may further push people to the e-commerce giants. And while the Postal Service aims to provide more overnight and fast delivery options, including new regional options, the cost of guaranteed, fast delivery are often too much for small business to bear.
DeJoy has been a polarizing figure for much of his tenure, which began in May 2020. But the question of how much of a role the Postal Service should play in helping small businesses compete ultimately rests not in his hands but in Congress’s. Harnessing the power of the Postal Service toward this end would require more funds not only to speed service but also to pay for subsidies specifically designed to aid small businesses.
The Biden administration has made clear that revitalizing antitrust is a top priority. Yet alongside top-down regulatory checks on excessively concentrated power, far more can and should be done to help level the playing field from the bottom up, by helping the small players.
There’s a long-standing debate about whether the Postal Service should be managed more as a business or as a public service. That debate is not about whether the post office should be well run — it obviously should be. The debate is about how to weigh considerations that go beyond the profit and loss of the postal enterprise itself. Those considerations can change over time.
In 1775, when Benjamin Franklin became the first postmaster general of the United States, The post office’s broader goals involved promoting the communication and commerce needed to help an infant nation thrive. Today, the nation is far stronger and richer (plus we have email). But huge disparities in power and wealth are fueling discord and backlash.
Faster delivery times and mail subsidies for small businesses are no silver bullet for the problems of monopoly in the retail sector. But they would go some way toward restoring consumer choice. Every debate over the Postal Service’s funding should include discussion of its crucial role in promoting a more balanced economic system.
