Making the Postal Service Great Again

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On April 12, 2018, President Trump issued an executive order establishing the Task Force on the United States Postal System to evaluate the Postal Service’s operations and finances. The Postal Service’s current business model is financially unsustainable, as evidenced by its chronic history of operating losses. The statutory monopolies that Congress granted the Postal Service cannot protect it from the shift in consumer taste resulting from technological innovation in electronic communication and online commerce. In this context, the Task Force is asked to evaluate, among other things, the expansion of the package delivery market, the Postal Service’s role in competitive markets, and the decline in letter-mail volume as they relate to the Postal Service’s ability to self-finance. The proper identification of the Postal Service’s “appropriate share” of institutional costs that the Postal Service, by statute, must recover from its sale of competitive products (such as package delivery) is central to whether the Postal Service can achieve a financially sustainable future. In its 2018 statutorily mandated review of the Postal Service’s appropriate-share requirement, the Postal Regulatory Commission (PRC) proposes using a formula-based approach to calculate the appropriate share of institutional costs that the Postal Service must recover from its sale of competitive products. However, the PRC’s proposed rule is unscientific and, if promulgated, would be arbitrary and capricious, unsupported by substantial evidence, and clearly erroneous.

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Cite as

J. Gregory Sidak, Making the Postal Service Great Again, 3 Criterion J. on Innovation 101 (2018).