From Robotic Automation to Electric Vehicles, New Report Argues Innovation Must Drive Postal Reform, Not Privatization or Subsidies

February 11, 2021

WASHINGTON—With the Biden administration and Congress turning their attention toward U.S. Postal Service reform, which has been deeply impacted by the COVID-19 pandemic and the longer-term trend toward digital transformation, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, today released a new report proposing an 11-point plan to increase efficiency and improve service through innovation instead of privatization or subsidies.

ITIF’s report urges policymakers to give the USPS freedom to make the kinds of changes that are needed to reduce costs, and to establish a major USPS Technology Innovation Fund to ultimately enable robotic last-mile postal delivery. Absent serious reform, USPS’s finances will continue to suffer, ITIF concludes.

“Given the long-term decline in first-class mail due to digital diversion, the way to keep the Postal Service afloat is neither to privatize, nor to over-subsidize—it’s to reform and innovate,” said ITIF President Robert D. Atkinson, who authored the report. “Policymakers must enable USPS to make the often painful changes it needs to be sustainable in the short- and medium-term. It also needs to provide resources to help USPS to transform technologically, especially to ultimately transition to robotic mail delivery, which if successful will not only help USPS be sustainable, but also will drive U.S. productivity and competitiveness overall.”

According to the ITIF report:

  • Congress should appropriate at least $1 billion a year dedicated to a USPS robotics development and adoption fund. Automating local delivery of the mail is the best way to reduce costs. Robots show promise but need more development.
  • Congress should allow USPS to continue to take full advantage of its efficient national last-mile delivery network for mail and packages, in part by preserving six-day-a-week delivery.
  • Policymakers should also pay USPS to replace existing vehicles past their expected life with clean energy vehicles.
  • Because of continued declines in first class mail and the growth in package volume, Congress and the administration should not require USPS to raise its prices for package delivery.
  • Congress should explicitly encourage USPS to close money-losing post offices and, where appropriate, work with private-sector companies to provide acceptance services.
  • Congress should explicitly encourage USPS to consolidate postal processing facilities in an effort to create the most efficient overall national processing network.
  • Congress and USPS should support expanded work-sharing in areas such as sorting and processing. USPS and the Postal Regulatory Commission (PRC) should regularly update work-share discounts to reflect current network operations.
  • Congress, USPS, and the postal unions should craft a grand bargain on retirement; in exchange for increasing the age of retirement for postal workers, Congress should wave at least a portion of the total amount of pre-funded payments USPS is delinquent in making to its retirement fund.
  • In addition, Congress should give USPS more flexibility to adjust wages to reflect local costs of living.
  • Neither Congress nor USPS should expand the mission of USPS to new, non-postal-related services.
  • Congress should provide the postal service with the same kind of one-time funding, as airlines and other private-sector employers that are facing a steep decline in demand due to the pandemic.

“These are all necessary measures,” said Atkinson. “Congress can and should enable USPS to be as efficient and innovative as possible. That will require stronger partnerships with the private sector, and embracing radical technological innovation. There are parts of the Postal Service where the private sector should play a larger role, and there are parts where government should play a key role. But the Postal Service needs the freedom to reinvent itself and keep up with the advancements in its industry. That will be the best way to ensure its long-term survival and value.”

Read the report.