In August, the Senate approved three nominees to the US Postal Service (USPS) Board of Governors (Board), bringing the total number of appointed governors to 5, meaning that the Board now has a quorum for the first time since 2014. There was considerable anticipation towards their first meeting, scheduled for October 3, 2019.
In the past, the Board would hold their quarterly meetings in 2 parts – a closed business meeting, plus a public meeting for announcements. In a departure from this practice, the Board only held a closed meeting. In the Federal Register, the Board stated that the meeting would include:
1. Strategic Items
2. Financial Matters
3. Compensation and Personnel Matters
4. Administrative Items
5. Executive Session—Discussion of prior agenda items and Board governance.
Each one of those topics is of importance to the mailing community, and we need to know where the board stands. Additionally, the industry has been waiting for a full Board, so the USPS can take action on multiple strategic issues. Among the major issues are:
- Court ruling on First-Class Mail Rates. On September 13, 2019, the District of Columbia Circuit Court ruled that the January 2019 5-cent increase of First-Class Mail stamps was not consistent with the Postal Accountability and Enhancement Act of 2006 (PAEA) and should be vacated (see Carlson v. Postal Regulatory Commission, No. 18-1328).
However, 3 weeks later and no clear path forward has been announced by either the Postal Regulatory Commission (PRC) or the Board. Both organizations need to let industry know whether they intend to appeal. This ruling has a direct impact on how the rates for 2020 will be calculated.
- PRC and Proposed Rate Reform. The PRC released a proposed new rate structure in 2017. While the new structure would address some of the financial problems of the USPS, the PRC has withheld taking action to implement the rule.
The Board should publicly call on the PRC to implement the new ratemaking rules.
- Impact of Declining Volumes in Parcels. In the 3rd Quarter Financial report, the USPS announced a 3.2 percent decline in package volume. FedEx has implemented plans to pull more packages from the Parcel Select category, and Amazon continues to grow their delivery fleet.
The Board needs to explain how they will offset this significant loss of revenue.
- Legislative Reform and the 10-Year Plan. It has been months since the Postmaster General appeared before the House Oversight Committee. The industry has still not seen the 10-year plan. While 10-year plans have little chance in ever becoming reality, this one will be used by supporters and opponents of the USPS to drive postal reform.
The Board should release the plan immediately and then call on the House and Senate Committees to get to work.
- Board Leadership and Potential Loss of a Quorum. The Chairman of the Board - Governor Robert Duncan – saw his official term expire in December of 2018, and he’s now in his “hold over year”. For some reason, his nomination wasn’t included in the August vote for the other Board members. If he isn’t confirmed by the Senate before December 31, 2019, the Board will return to not having a quorum.
The Board needs to get the message out to the general public about the impact of the Senate’s not voting to confirm Governor Duncan.
The print and mailing industry is in a state of upheaval and uncertainty. We’re in the midst of an unprecedented moment where each month, at least a dozen service providers are bought, declare bankruptcy or close their doors. Direct mail is losing its already small share of revenue dollars, impacting every player in the supply chain.
In the midst of this upheaval, the USPS Board of Governors has a responsibility to be transparent on their immediate and long-term plans. Further, the members of the Board need to be vocal advocates for reform – with rates and legislation. The industry needs to know where they stand.
Now is not the time for silence.