IN NOVEMBER 2020, George White sent his mother a birthday card from where he lives in Ohio to her home in Virginia. The typical United States Postal Service (USPS) promise is to get first-class mail to most destinations within three days.
White—as the president of an Ohio-based greeting card company, Up With Paper, that makes heavy use of the postal service—suspected that an on-time delivery wasn’t in the cards.
To be on the safe side, he mailed his mom’s birthday card a week early. It got there a week late.
“That was a bummer for me,” says White, who serves as the president of the Greeting Card Association, a trade group. It was also a bummer for his industry. The value of greeting cards rests on timely delivery of products commemorating particular dates, be they birthdays, graduations, or holidays. Late delivery, White says, “can lead to less greeting cards being purchased and mailed. Because if they’re not going to get it in time, what’s the point?”
White was far from the only one to experience late-arriving mail-in 2020. In the final months of that year, with tens of millions of people quarantining at home, Americans sent and ordered an unprecedented number of holiday packages. E-commerce, which relies on shipping services to deliver goods to customers, had been growing rapidly even before the pandemic, but COVID-19 moved retail online at an even faster pace.
Complaining about the post office has long been a national pastime. Years of declining paper mail volumes, persistent fiscal deficits, and a logistics network not optimized for package delivery were all challenges that predated COVID-19. The pandemic made them much worse.
At the same time, a record number of Americans voted by mail in what would become one of the most hotly contested presidential elections in U.S. history. Critics wondered if the troubled agency would be able to handle the added volume created by the additional mailed ballots, while some Democrats worried that then–President Donald Trump might use the government-run post to steal the election.
The combination of preexisting retail trends, increased package volume spurred by stay-at-home workers, and high-stakes political gamesmanship surrounding mail-in voting pushed the postal service nearly to the point of collapse. By late December, only about a third of first-class mail was getting to its destination on time in major East Coast metros such as New York, Philadelphia, and Baltimore. Libertarians and other critics who have long warned about the inefficiencies of a government-run postal monopoly could at least feel some vindication when they found their mailboxes empty.
“In my experience of 18 years following the postal service, we had the most high-salience, bizarrest postal politics moment ever,” says Kevin Kosar, a resident scholar at the American Enterprise Institute.
The dual crises of the election and the pandemic are now fading, but this affords the troubled agency little breathing room.
With short-term fires extinguished, the USPS now must ask itself some existential long-term questions. Is the post office’s traditional business model finally falling apart?
‘EVERY DAY IS CHRISTMAS’
MARCH 2020 SPARKED a big change in Kate Murray’s business, Quick Brown Fox, a one-woman Brooklyn-based greeting card company. The retail stores she normally sold bulk orders of cards to were all shut down. Meanwhile, customers were stuck inside with little to do but shop online.
“Suddenly people were home and people were buying,” says Murray. So she pivoted. Instead of larger shipments to businesses, she started filling individual, direct-to-consumer orders. To make up for the drop-off in wholesale cards, she started to push higher-price-point candles and wrapping paper.
Her changing business model meant changes in how she interacted with the USPS. Concerns about going to a physical post office meant she had more packages picked up at her front door. Suppliers, too, ended up shipping more directly to her. More candles and fewer cards meant more packages, less first-class mail.
For Murray, these shifts in her business all proved manageable. She says she was pleased with the postal service during the pandemic. It was likely much less pleased with her.
The postal service’s massive logistics network is made up of 644,000 people staffing around 34,000 post offices, plus a few hundred annexes, hubs, and processing and distribution centers. It was primarily designed to get high-margin “flat mail” to 161 million addresses across the country.
“For most of the U.S. Postal Service’s history, letters, cards, and magazines were its bread and butter,” notes a USPS Office of the Inspector General (OIG) report from September 2020. “Its delivery infrastructure was primarily designed with mail-in mind—from the vehicles to the facilities to the mailboxes.”
That business model has been in steady decline for over a decade, with paper mail volumes falling 45 percent between 2007 and today. In fiscal year 2020 alone, they fell 11 percent. In an age of near-universal email access and paperless billing for every imaginable service, mail you can fit in an envelope has become increasingly irrelevant.
Thanks to the rising popularity of e-commerce, however, packages are in greater demand than ever. An October customer survey by the USPS OIG found that the number of respondents who ordered a product online at least once per month rose to 81 percent in 2020, up from 57 percent in 2019. The number of packages handled by the service rose from 6 billion in fiscal year 2019 to a little over 7 billion in fiscal year 2020, a 19 percent increase. This is causing serious problems for the USPS.
“Paper mail and boxes are not the same thing,” Kosar says. He pointed to congressional testimony from Louis DeJoy in March, in which the postmaster general said that your average USPS tractor-trailer could carry 500,000 pieces of first-class mail...or about 5,000 packages.
It’s also a crowded field given the existence of private parcel rivals like FedEx and UPS.
Meanwhile, people’s reticence to visit physical post offices during the last year meant more mail had to be collected and dropped off at individual residential addresses, often in dense urban areas—where constrained space makes pick-ups and deliveries more difficult—or rural locations that private shippers don’t serve.
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