The Elephant (and Donkey) in the Postal Room

The point of this post is not to demonize any side of the issue but rather to highlight the inherent problems that the ecosystem has when it comes to dealing with its largest issues. It should be expected that each side will fight for their own interest and finding a compromise that everyone can agree is an extremely difficult task, especially at a time where legislative gridlock is the norm for almost all issues.

Self Interest (Sacred Cows) vs. the Common Good (Ecosystem)

Postal reform and postal innovation have led to competing ideas about what the Postal Service (and postal ecosystem) is, how it should function and how it gets paid. As actors on several sides of the different issues clash, it seems like the elephant in the room gets ignored. The that central issue is that reform is necessary and the Postal Service is losing money. This is not to say that there aren’t solutions out there, but some of the practical ideas conflict with the interests of some of the largest players in the ecosystem.

The Problem with Reform

There is a certain sense of futility in discussing reform as it relates to Congress in 2014. Even small pieces of legislation appear dead on arrival when they go from the House to the Senate or vis versa. Dismissing the possibility altogether may be the larger tragedy.

With the USPS desperate to cut costs its finding problems dealing with some of the major players. Unions are massively opposed to shortening the days of delivery as it would decrease their labor and power. Mailers are opposed to major price increases as it seriously affects their bottom line, and can argue that they are the largest and most important customer of the USPS.

Meanwhile hybrid solutions, such as increasing services in highly profitable metropolitan areas and decreasing services in costly rural areas are being ignored by a standstill Congress. Issa’s suggestion of cluster boxes, although it saves a lot of money, is unpopular with almost every player including the often forgotten recipient of the mail: US citizens. The 2014 election seems an unlikely place to see a major cultural shift in Washington so it seems the USPS will be kept with its hands tied as the problem continues to face everyone in the ecosystem.

The Problem with Innovation

The Committee on Oversight and Government reform recently held a hearing on Innovation for the USPS. During the hearing we found mudslinging, followed by a testimony that questioned the understanding of the word “innovation” and a few members of the private sector championing smaller successful partnerships they have had with the USPS.

One of the issues that stood out for me was the fundamental issue behind OutBox and other “feedback loop” related innovation. Since the theoretical goal of this “innovation” is to reduce the amount of “junk” mail for the USPS “customers” it is met with resistance. The reason I use so many quotations is because the concept of OutBox is hardly innovative and has serious problems justifying its cost, and while many consider a lot of direct mail “junk” it is a form of marketing that continues to be considered effective on some level, finally there is a debate over whether US citizens are the primary customer of the USPS or whether that is the mailers who provide the Postal Service with a large portion of their revenue. These issues were brought up before the committee. While I don’t necessarily endorse any side of the fence on this kind of issue, the point I am trying to convey is that innovation in the postal ecosystem is often met by torch and pitchforks. The Outbox example is only one of many examples.

The Problem with Disruption

Disruption has a tendency to destroy an old way of doing things and technology such as drone delivery has the potential to destroy jobs that some have held for a long time. Traditional players will follow the logical action of resisting this sort of change. However, when it comes to parcel delivery, the fastest, cheapest and most effective model will win in the end. Maybe that answer is drones, maybe it isn’t. The ecosystem is evolving with parcel delivery and that means growth, but that isn’t necessarily good news for everyone. Consumers ultimately decide market trends, but the industry has the ability to fight back with regulations. Simply look to the slowly evolving Cable and Internet world where Google Fiber creeps its way across the states and content providers find more ways to circumvent traditional channels to reach its customers a la Netflix. The consumer will find a way.  The best thing anyone can do is create a model that incorporates digital and innovative ideas while remaining flexible.

The Elephant in the Room

The space is changing and every player may not be around in the next ten or even five years. There may be an elephant in the room but necessity will force change over a long enough period of time. The USPS and the postal ecosystem have so much to offer the consumer, but we may not provide sufficient solutions to solve the problem in time. That would be a tragedy. We may not recognize what the future ecosystem will look like, but it will probably have left a lot of today’s sacred cows behind.

By Bryan Klepacki

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