The Route Forward for the U.S. Postal Service: A View from Stakeholders

House Subcommittee on Government Operations and the Federal Workforce

2025-06-24

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Source: Congress.gov

Summary

The meeting addressed the critical challenges facing the United States Postal Service (USPS), including its financial instability, operational inefficiencies, and the impact of its strategic plan, "Delivering for America" (DFA)[ 00:02:36 ] . Witnesses and committee members discussed various reform proposals, the role of public-private partnerships, and the implications of potential privatization for maintaining universal service obligations.

Themes

Challenges and Criticisms of the Delivering for America (DFA) Plan

The "Delivering for America" plan, despite its good intentions, has been widely criticized for failing to deliver promised financial results and leading to widespread degradation of package delivery service, particularly in rural areas. Speakers highlighted concerns about the insourcing of workload, overbuilding of processing facilities, and a lack of transparency regarding financial models and assumptions. Many called for an immediate pause in the DFA's implementation, including capital spending and rate increases, to allow new leadership to reassess the strategy.

Persistent Financial Instability and Proposed Reforms

The USPS faces dismal financial health, reporting billions in losses annually and operating with an unsustainable business model, despite significant government assistance. Proposed reforms included reducing staff, ending the DFA plan, and investing USPS pension assets in a diversified portfolio to yield greater returns. Some suggested providing stable funding through direct congressional appropriation to cover the universal service obligation, similar to models in Europe. The Postal Service's high labor costs, which constitute 80% of total costs, were also a major concern, with suggestions to match labor expenses with declining mail volume.

The Role and Potential of Public-Private Partnerships

Several speakers advocated for increased public-private partnerships to enhance efficiency and reduce costs, particularly for middle-mile logistics, software development, and technology adoption. It was suggested that USPS should focus on its core strength of last-mile delivery while leveraging private sector expertise for other operations. These partnerships could also help address the mismatch between the size of the USPS workforce and declining mail volume[ 02:37:29 ]

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Concerns Regarding Privatization

There was strong opposition to privatizing the Postal Service, with participants emphasizing its critical role as a public service and infrastructure, particularly for rural communities and vulnerable populations. Concerns were raised that privatization would eliminate universal access, uniform pricing, and essential services like medication delivery for veterans. It was clarified that full privatization, involving the sale of USPS assets, would require an act of Congress and is unlikely to gain sufficient public will[ 01:56:05 ]

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Workforce Protection and Service Quality

The safety and protection of letter carriers were highlighted, with an urgent call for Congress to pass the Bipartisan Protect Our Letter Carriers Act[ 01:46:49 ]

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. Debates arose concerning staffing levels, with claims of both overstaffing (due to declining mail volume but increased employees) and understaffing in specific delivery roles[ 01:51:44 ]

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. The Regional Transportation Optimization (RTO) initiative was specifically criticized for degrading service in rural and remote areas by reducing collection times and creating delays, while its promised savings were questioned.

Oversight and Reform of the Board of Governors

The current governance structure, specifically the Board of Governors, was deemed "broken" and in need of replacement or significant reform. Critics argued the board lacked rigor in overseeing USPS finances and failed to adequately address the issues arising from the DFA plan. Suggestions for a new board included a smaller, more focused commission-type entity with sufficient resources to attract competent individuals and ensure greater transparency and oversight[ 02:55:04 ]

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Tone of the Meeting

The overall tone of the meeting was serious, concerned, and urgent, reflecting the gravity of the issues facing the USPS[ 00:03:33-00:03:36 ] . While there was clear bipartisan agreement on the need for fundamental change and improvement, discussions were also critical and direct, particularly concerning the efficacy of current strategies and leadership[ 00:03:09 ] . Committee members and witnesses expressed a strong desire to find practical solutions to preserve and strengthen the Postal Service for the American people[ 00:03:33 ] .

Participants

Transcript

who are being shot at, who have been stabbed, who have been robbed, who find themselves holding on with dear life to arrow keys to protect those keys so that those individuals can't go in and rob boxes of mail and hurt people in the process by stealing.  There are real issues in terms of converting the fleet that the Postal Service uses.  We've debated that back and forth over and over again.   And there are real issues in terms of delivery.  What is going to be the standard delivery time and what happens with respect to first class mail and parcels and do we have real goals going forward for the future in terms of making this service even better?  That's what I've been asking a lot of people and a lot of people have been asking me then why are we paying more money   for the same service.  And some cynically say, why are we paying more money for an even worse service?  So the Postal Service, I think, clearly has to be efficient, reliable, and stable.  How we get there is not any one person's fanciful idea.  I can't pull an answer out of the sky and guarantee its success.  But I think in having forums like this and discussions like this,   where we recognize everybody is not on the same page, but where we are committed to making sure that everybody helps push toward a consensus is probably the best thing that we can do going forward as we try to remedy those frustrations and make it clear that the Postal Service in the United States is not for sale and will not be sidelined and will not be weakened.  So, Mr. Chairman, I thank you for the opportunity again to join with you.   as we try to find some answers to so many things that beset us.  And again, I'm glad that so many people have turned out to offer testimony today.  And with that, I yield back.
Chairman yields back his time.  Thank you very much, Mr. Steiner.  I'm sure we'll want an opportunity as a savvy professional who's been in the industry to hear some of the ideas that we will hear today.  And with that, I want to welcome the witnesses that we have today.  I'd like to   give a brief introduction if I can.  Paul Steidler is a senior fellow at Lexington Institute.  Mr. Steidler, thank you very much.  Jim Cochran is CEO of the Package Shippers Association.  Mike Plunkett is a CEO and president of the Association for Postal Commerce.  Tom Schatz is the president of Citizens Against Government Waste.   Elnas Batulas Patel is an assistant professor at the Mariner-Eccles Institute for Economics and Quantitative Analysis at the University of Utah.   and Brian Renfrow is President of the National Association of Letter Carriers.  We look forward to hearing from each of you today and pursuant to Committee Rule 9G, each of the witnesses will please stand and raise their right hand to be sworn.   Do you solemnly swear or affirm that the testimony that you're about to give is the truth, the whole truth, and nothing but the truth?  So help you God.  Let the record reflect and show that the witnesses, each of them, have answered in the affirmative.  Thank you very much.  You may now take a seat.   Please do recognize that the distinguished gentleman from Maryland alluded to a vote that is expected to be called in a few minutes.  It is my idea that we will work through each of these opening statements.
We will then head off.  We'll do, I think there are three votes, which means you'll get a longer bathroom break, and then we will reappear about 10 minutes that I will announce.   after the last vote.  I now would recognize Mr. Cochran for his opening statement.  The esteemed gentleman is recognized.
M
Mr. Jim Cochrane
Good afternoon, Chairman Sessions, Ranking Member Mfume, and distinguished committee members.  It's an honor to speak with you about the future of the Postal Service.  For 250 years, the Postal Service has been connecting communities, facilitating commerce, and delivering vital information.   I retired from the postal service after 43 years of service.  The last 25, I was focused on the shipping business.  I have an extensive knowledge of the shipping marketplace, e-commerce trends, ongoing technological advances in this space.  And I leveraged the opportunities created by e-commerce to drive revenue growth and profitability while at the post office.

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