[Congressional Record Volume 141, Number 1 (Wednesday, January 4, 1995)]
[Extensions of Remarks]
[Pages E13-E14]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


               MAKING THE POSTAL SERVICE MORE COMPETITIVE

                                 ______


                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mr. CRANE. Mr. Speaker, remember that lame old excuse, ``the check is 
in the mail.'' In days gone by, those who heard it hoped and prayed it 
was true. For if it was, they knew that they would soon be getting 
their money.
  Not so today. As far too many people have found out, putting the 
check in the mail gives neither the sender nor the would-be recipient 
any assurance whatsoever that it will actually arrive at its intended 
destination. Or that it will get there in time to avoid late charges or 
black marks on one's credit rating.
  Over and over this past year, we heard stories about mail being 
dumped, burned or stashed by mail carriers or hidden away in warehouses 
by postal managers not wanting to admit how far behind their delivery 
efforts had fallen. At least a half dozen of these instances occurred 
in the Chicago area alone.
  On top of that, reports of slow mail delivery have been too numerous 
to mention. As a result, people have lost confidence in the Postal 
Service and remedies such as a new $7 million logo or a 3-cent increase 
in the cost of first class postage have done nothing to restore it.
  To be fair, the U.S. Postal Service [USPS] has made repeated efforts 
in recent months to improve the quality and timeliness of its service. 
But this is not the first time questions have been raised about the 
USPS's performance or that attempts to improve it have been made. To 
the contrary, there has been enough past efforts, the Postal 
Reorganization Act of 1970 being the most prominent, to suggest that a 
whole new approach is needed.
  Generally speaking, most USPS employees are conscientious, hard 
working individuals who want to do a good job. For the most part, the 
problem is not so much with them as it is with the system in which they 
operate. Put simply, that system lacks the incentives necessary to 
bring about the gains in productivity and customer service that are 
essential if the USPS is to live up to the public's expectations. For 
one thing, the USPS is insulated against competition in the delivery of 
first class mail which means customers need not be won over but can be 
taken for granted. For another, it is subsidized by the Federal 
Government, which means there is less pressure to be efficient. For a 
third, it does not have the bottom line incentives--such as the profit 
motive and profit-sharing arrangements--which make many private 
companies so productive.
  A quick look at the parcel delivery business bears out this 
assessment. Thirty years ago, most all parcels were delivered by the 
Postal Service. Today, competitors like FED-EX, UPS, and DHL handle a 
vast majority of packages shipped around the country, despite the 
built-in advantages enjoyed by the USPS. Also, the growing movement 
towards corporate competition in, or the privatization of, postal 
services in other countries reinforces that hypothesis. New Zealand, 
for instance, converted its postal service from a government department 
to a state owned but decontrolled corporation in the late 1980's and 
has watched it flourish ever since. Last year, Hol- 
[[Page E14]] land partially privatized its postal service and Germany 
is doing the same starting this month. Also, there has been 
considerable discussion in Great Britain about the possibility of 
privatizing parts of the Royal Mail and Parcelforce, a move favored by 
a number of its top managers.
  In this country, the objection to privatization has been that it 
would result--allegedly--in cream skimming by USPS competitors which 
would leave the USPS with the financially troublesome prospect of being 
left with only rural and bulk mail to deliver. However, the logic 
behind such an assumption not only does a disservice to the 
capabilities of USPS employees but it overlooks the significance of the 
telecommunications revolution now underway. What with the growing 
popularity of FAX machines, modems, internet, E-mail and the like, the 
truth of the matter is that the USPS is more likely to be left with 
rural and bulk mail to deliver if it doesn't go private than if it 
does. Only by keeping up with the times and the competition, which can 
best be done by operating in the same way as the competition, can be 
USPS hope to thrive in the future.
  Understandably, many USPS employees, fearing for their jobs, have 
certain reservations about going that route. Since change often breeds 
uncertainty and uncertainty is unsettling, such a reaction is only 
natural. However, change also brings opportunity and that would 
certainly be true if the USPS were to be converted into a private 
corporation. And it would be especially true if that corporation were 
to be an employee owned one. Not only would the new entity be able to 
explore new markets and develop new ways of doing business, both of 
which could benefit postal workers, but making it employee owned would 
give workers more control over their futures as well as a share of the 
profits.
  For all these reasons, I have decided to introduce once again 
legislation that would convert the U.S. Postal Service into a totally 
private, employee-owned corporation. As was the case with my previous 
bills to this effect, this measure calls for this transition to be 
implemented over a 5 year period, after which the USPS's current 
monopoly over the delivery of first class mail would end. However, 
there is one difference between this bill and my previous legislation. 
To make the prospects for the success of this new private sector 
corporation even more likely and attractive, the measure I am 
introducing today calls for the cost-free transfer of the assets held 
by the USPS to that corporation. Now only will that make the transition 
to private status easier to arrange, but it will speed the day when 
American taxpayers will no longer have to subsidize an operation that 
has been losing money as well as the mail.
  Given the clear need for more than just minor adjustments to our 
postal delivery system, I hope my colleagues will carefully consider 
this legislation and then give it their support by signing on as co-
sponsors. If America is to be truly competitive in the forthcoming era 
of computers and telecommunications, we simply cannot afford a 
correspondence delivery system that is neither prompt nor reliable. 
Instead, we need a system that is state of the art and the best way to 
get it is make use of, by making the USPS a part of, the private 
sector.


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