Why is the Post Office Terrible?



We are halfway through December. This is the busiest time of year for companies like UPS, Fedex, and Amazon.

And the question on everyone's mind is, “Can I get my package delivered by the 25th?”
All of this is going on, just like it does every year, and yet….my local Post Office had one solitary person working the front desk.
This would have been irritating on its face, but to add insult to injury, an older woman next to me heralded the Post Office’s “efficiency” and assured everyone that we would be in and out “quickly.”
While I recognize that patience is a virtue and a Fruit of the Spirit, the Post Office was not efficient and after waiting 45 minutes (with a long line of people still behind me), I can also say it was not quick.
Looking into the Post Office’s history reveals a long line of inefficiencies.
They haven’t made a profit since 2006 and in 2019 alone the Post Office lost 8.8 BILLION dollars (that’s $8,800,000,000)(1)
What’s the deal? Why does this happen?
The Foundation for Economic Education has a nice breakdown of the difficulties facing the USPS (2), but the more succinct (and Biblical) explanation is: Incentives….matter.
“I am the good shepherd. The good shepherd lays down his life for the sheep. He who is a hired hand and not a shepherd, who does not own the sheep, sees the wolf coming and leaves the sheep and flees, and the wolf snatches them and scatters them. He flees because he is a hired hand and CARES NOTHING FOR THE SHEEP. I am the good shepherd.” -John 10:11-14 (emphasis added)
In Jesus’ parable, it’s personal ownership that provides the incentive. How do incentives impact the Post Office?
Well for starters, the USPS only exists because it (and the Supreme Court) says it has a constitutional monopoly over delivering the mail(3). Given that the USPS is required to exist, then it follows that the government (via the taxpayers) must guarantee its funding.
This means the USPS has little incentive to improve its customer service, because there are no direct competitors for people to turn to. It also means they have no incentive to manage their own budgets, because the government (via taxpayers) will always give them more money.
Now, an interesting thing to note is that UPS, Fedex, E-mail, texting, and instant messaging are all indirect competitors that have circumvented the USPS’ monopoly on our mailboxes. And this in turn has further contributed to the USPS budget problems. If the USPS operated like a traditional for-profit company, eventually they would go bankrupt like Circuit City, Sears, and Toys R Us. But instead, the government (via taxpayers) will continue to fund a failing company, one that we likely don’t need anymore.
Contrast all of this with Amazon, a company incentivized to earn a profit. Those profits are earned by protecting and retaining its “flock” of customers(4). Interestingly, Amazon used to ship 60% of its packages through USPS, generating $1.6 billion of profit for the government agency(5). But just a few years later, the spinoff company Amazon Logistics, with its own fleet of trucks, vans, and airplanes, is now delivering two thirds of Amazon’s packages(6).
Think about that. It was cost effective for Amazon to create a whole new shipping company(7)! That’s how bad the Post Office really is.

Sources:

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