Postal Service’s backdoor bailout
Today, packages account for about 6% of the mail the United States Postal Service moves but 40% of its revenues and nearly all the growth .
The Postal Service is spending billions on trucks designed to accommodate packages as well as regular mail delivery, eliminating billions of dollars of mail-handling equipment to make way for more package processing and changing its delivery methods and schedules to grow its package delivery business.
The package delivery and regular mail delivery expenses are supposed to be kept separate. Delivery of first-class mail is considered essential and given monopoly protection, but commercial enterprises are expected to pay their way or be phased out. The Postal Service avoids doing this, so we don’t know whether the package business has been profitable.
What we do know is revenues on packages climbed $3.9 billion this year over last thanks to the pandemic-induced online shopping. But the Postal Service still lost $6.9 billion and expects to lose $160 billion over the next decade. It faces still more spending, for new trucks, mail-handling centers and equipment, and new employees, to accommodate its emphasis on packages.