The United States Postal Services (USPS) is currently the second largest public employer after the federal government with more than a half million workers, and it is operating more than 200,000 vehicles. The USPS has its roots in the 17th century where mailing services were provided over a small geographical area, within the New York State. As time advanced, and improved transportation means became available, there was a need for people to send mails on longer distances than previously. Because of the need to meet the clients’ requirements, in the 18th century, around the year 1775, the USPS was transformed into a full-fledged independent agency authorized by the United States Constitution. The USPS, unlike any other independent agency, is authorized by the Constitution, to serve all the Americans within the United States. However, following the history of the USA and the development of the United States’ Constitution, the USPS developed into its current state through applying new legal protocols, and has faced significant political changes.
The origin of the USPS takes economic, legal, and political sources. Given the timeframe between the 16th century and the 18th century, the American Constitution was still under development, as Acts, Clauses, and Chapters were being finalized or amended at the time. The economic value of the USPS has since then became different regarding the nature of political administrations, as well as the general economic status. Towards the late 20th century, the USPS was considered to be one of the economically supportive companies, and was transformed through legislation under the Postal Reorganization Act of 1971. The current organization of the USPS is subject to the Postal Reorganization Act that sought to remove political bias from the operations of the USPS. The main aim was to enable operations of the company that would push the organization toward success in terms of service delivery, as well as the development and growth. The development of the USPS from the initial status of serving small areas to the current of serving the entire nation was through the organization of economies of scale, as opposed to governance and constitutional obligations (Herr, 2011a).
ECONOMIC EFFECTS OF THE USPS
Currently, the USPS employs about 574,000 individuals and runs a fleet of more than 200,000 vehicles. The consumption of oil of the vehicles alone creates revenue to the U.S. government, and allows the livelihoods of about 200,000 drivers, who operate these vehicles. Considering the fact that employment in the U.S. is one way, through which the government gets revenue and raises its GDP, the USPS contributes immensely to the economy of the United States through the provision of work to thousands of people. Historically, the agency had a few branches and a limited number of workers, who served in the branches. As time went on, and the involvement of the government became eminent, the USPS developed to be a large corporation, making a great impact to the economy of the USA (Herr, 2010). With the Constitution and the U.S. Congress making the agency a monopoly, USPS had not faced competition from any other organization from the late 16th to the mid-20th centuries. This benefited the agency in organizing its operations throughout the United States of America, and utilizing economies of scale to expand the business margin.
The process to cut the operations of the USPS as a way to cut the spending is under way. Considering that the economy of the U.S. is not as favorable as many business models would like it to be, the USPS is taking steps to reduce spending in regards to the diminishing demand of its services. The predicaments of the USPS can be blamed with two causal factors: legal obligations, and the encroachment of the digital era. The fact that the USPS is legally obligated to pay retirees the retirement benefits for a span of 10 years increases the financial burden, hence limiting the profits made from the services. On the other hand, the digital era has had an impact on the USPS, as many people, who used to mail, are suing electronic devices to get notifications from their banks, Electricity Company, insurance institutions, and health facilities today. Therefore, limiting the use of mailing services as most of the services can be done online. Currently the USPS is struggling to operate on a profit basis, as the political, legal, and economic factors continue to disturb the objectives of the agency.
During the 18th century, the USPS had not been operating; however, the USPD (United States Postal Office Department) was in charge of the mail services. Benjamin Franklin founded the USPO under the decree of the Second Continental Congress, whereby Congress was required to establish post offices, as it is stated in the First Article of the United States Constitution. The USPOD (United States Postal Office Department), therefore, was established in 1792 following the provision of the Constitutional Article. Prior to the transformation, the USPO was a part of the Presidential Cabinet, whereby the Postmaster General was in charge of operations, and running of the mail services (Herr, 2011b).
During this period of transforming the USPO to the USPOD, post office employees were a subject to the ‘spoil systems’ – where prominent politicians were appointed direct to the management of the agency, as a way of paying tribute to the loyalty to the United States of America. The negative effects that were associated with this system included mismanagement of funds, offices, and opportunities to expand the agency. The issues of mismanagement of the offices were caused by the fact that the appointed individuals did not possess any experience to run such offices. They did not have a qualification to run the Postal Office Services, because, in many cases, they did not know how operations were conducted. The ordinary employees, who understood the protocols of operation, were left to perform all the duties, while their inexperienced superiors pocketed hefty salaries for holding the positions they did not have qualification for. During this time, mismanagement of the agency sabotaged the opportunities of expansion and coverage of the market. Many people were in need of mailing services but faced the constraints of the bad management caused by the political situation. The roots of the USPS through these challenges were troubled, hence marking a slow growth rate of the agency. In theory, the development of the agency would have taken less than half a century considering the transformation of the service provider between 1775 and 1790 (Herr, 2009a).
ISSUES SURROUNDING THE USPS
Given the amount of time and resources wasted during the era of the spoil systems, the USPS would now be operating at the level of technology, other than the current one that is slow and involves numerous risks. Besides, because of the cost that was incurred during the era of the spoil system, the current USPS was stable for a couple of decades. The instability came after years of running a business as a monopoly organization in the large market. With backing from the government, the USPS enjoyed the benefits of attracting all the parties that were interested in using the mailing services. With change in time and technology, the monopolistic approach of marketing the USPS services has started to attract new players; therefore, scrapping some market margin of the USPS. Clients, using the mailing services, would like to be able to trace their mails and parcels, and be sure they reach the destination point safely. In the USPS service pack, technologies, such as the barcode, is currently unavailable; therefore, this makes clients shift to other agencies, like UPS and FedEx, who own such technology and provide such services.
Safer and faster mailing services are some of the considerations that the clients in the U.S. look for in this period of digitizing most of manual services. The USPS, besides its control of the services, due to its size and the number of clients using this service, are willing to get better services, where a guarantee of safety and speed of their mails is certain. Such challenges that are facing the USPS today are threatening the future of the organization; therefore, adding to the list of current-economic-crisis-generated challenges facing every sector. The current number of 574,000 employees of the USPS would be reduced by 18,000, while a majority of the fleet of vehicles would be considered for sale. This move would not only affect the output and generation of profits of the USPS, but also would contradict the fiscal and monetary policies proposed by the Ministries of Finance and Internal Affairs. The two ministries proposed a mechanism of reducing the inflation and creating job opportunities for the unemployed number of American citizens (Herr, 2009b).
MODIFICATION OF SERVICES
The USPS seeks to modify its services to overtake and surpass its competitors in terms of speed and technology to enable clients to access their deliveries, as well as track their mails. However, this late decision to change the model of operation and means of service provision has a capability of crippling the organization even further. The USPS, at the current state of affairs, in terms of technology use and use of fast means, cannot deliver urgent mails, though other service providers are able to do this. With plans to save on spending, the move to improve services is an absurd decision, as there is a lot at stake in terms of financial stability, and the installation of technological backbone will require extra funding. Optimization of the operations of the USPS is a physical responsibility that the organization seeks to use in improving its services. However, the political and legal challenges that face the USPS today are artificial and psychological, as they revolve around bad management and irresponsible decisions (Herr, 2011b).
In theory, the modification of services to include a better service-delivery platform will increase the output levels of the USPS, and will enable it to make more profits. The above situation will be achievable only if the cut off spending strategy does not aim at reducing the number of service delivery branches. However, if the USPS chooses to cut spending by cutting their margin of the market target, the planning will prove to be poor and exceptionally uneconomical. For example, if Mr. X has 20 hectares of land that he can cultivate using traditional means to make farm product worth of $200,000, it would be worthless for Mr. X to sell 10 hectares of land to modernize the farming method of the remaining 10 hectares if, in the long run, he will still earn product worth of $200,000. Concerning the case of the USPS, the possibility of closure of some more than 300 branches to maximize profits through a cut on spending is a form of balancing between negative and positive effects – with a neutral effect being generated (Rudman, and National Learning Corporation).
FACTORS CONTRIBUTING TO THE USPS’S ISSUES AND THE LEGAL OBLIGATIONS
According to the U.S. Constitution, in the Postal Clause in the First Article, the USPS is a legal agency that is obligated to serve all the U.S. citizens, as well as handle all the mails labeled as the U.S. Mail. Considering the obligatory requirement of the Constitution concerning the service provision of the USPS, mail delivery is a universal duty of the USPS where everybody should be served equally in terms of amount, speed, and safety of the mail delivery. Service delivery is a requirement of the Constitution as provided in the First Amendment, whose purpose is freedom of association in terms of the free speech. Mailing is a form of communication, hence the provision of the Constitution that is protecting the right of the clients. With the Constitution playing an important role in carrying the operations of the USPS, it means that the operations of the USPS are partially controlled by the government through the Constitution. As an independent agency, the involvement of the government is excessive to a point that the government through the Constitutional Acts and Policies unfairly decides the operations of the USPS.
The Postal Accountability and Enhancement Act (PAEA) of 2006 require the USPS to pay health care benefits to retirees for a period of 75 years for each individual receiving a 10-year span of benefits. The controversies of governance in the USPS management start with the government decisions, as the above requirement has not been imposed on any other non-governmental agency (Herr, 2009a; 2009b; 2011a; 2011). In theory, the government seeks to protect the rights and livelihoods of the retired personnel from the agency, while, in practice, it supports the suppressive requirements to the USPS. Currently, the struggles that the USPS faces in terms of maintaining positive productivity levels are associated with this requirement. For example, company Y hires 120 new people every month and plans to do so for the next 10 months. The maximum number of employees needed by Y is 1,200 employees with a probability of ? of those retiring from the company after attaining the retirement age. Considering that the company will pay retirement benefits to retirees for the duration of 75 years after the first lot of retirees retires, and support each for the duration of 10 years, then it means that every 10 months 1200 employees will retire and 1200 will be hired. This trend will accumulate to a point that 108,000 individuals would have been paid their retirement benefits, and another 1440 will be waiting for payments for the duration of ten years. The above scenario is the situation the USPS is faced with today, whereby the profits of the current operations are considered to pay retirees, hence limiting the developmental prospects of the agency (Herr, 2009a; 2009b).