Successful companies typically understand that achieving success hinges on their core competencies. They know how to keep their priorities straight, even if that means resetting some elements for long-term sustainability.
This is precisely what David Steiner is focusing on as he gets ready to assume the role of the next postmaster general. His predecessor, Louis DeJoy, veered away from what sets the U.S. Postal Service apart from competitors like UPS, which excels in delivering packages all night long. Unlike private carriers, USPS is required to ensure mail and package delivery to all addresses within the continental U.S. six days a week.
Unfortunately, DeJoy lost sight of this mission. He seemed to adopt a broad approach that pushed USPS into areas like offering banking services and selling office supplies, blurring its core focus and competing against well-established players who handle those tasks more effectively.
On May 9, during a meeting with USPS governors, the Postal Service disclosed alarming quarterly financial results. The net loss for the quarter soared to $3.3 billion, up from $1.5 billion the previous year at the same time. If trends hold, USPS is on track to exceed the documented loss of $9.5 billion from the previous year.
This alarming financial situation isn’t solely about stamp prices; it ultimately revolves around the costs incurred to fix these issues.
USPS has repeatedly failed to meet its own service standards, which, admittedly, have been relaxed over the past few years. Steiner, a former CEO of Waste Management and currently aligned with several corporate advisory boards—including FedEx—faces the challenge of bridging the gaps he sees as he steps into the role of the country’s 76th postmaster general. He brings a diverse background that highlights the importance of reliable delivery services for American consumers and businesses.
Given the urgent financial pressures and the continued inability to deliver on time, Steiner is in desperate need of a reset. He must distance the service from DeJoy’s ineffective strategies that led to widespread problems across the country.
DeJoy intended for USPS to broaden its operations significantly—collecting, processing, transporting, and delivering mail—all while hiring a vast number of new employees at considerable costs. This approach led to congestion and delays, as USPS lacked the necessary experience for such diverse tasks, underscoring the need for a re-evaluation.
Many of these innovations and reforms have effectively dismantled long-standing collaborations with the private sector, which historically helped USPS. The private sector can handle what’s known as “middle mile” tasks—processing, sorting, and transport—much more efficiently due to their technology and flexible contract options.
The incoming Postmaster General really needs to concentrate on the core mission: the “final mile” delivery of mail and packages across the country six days a week. This critical role is something Congress must support, especially given that private companies like FedEx and UPS often overlook rural areas. When they do deliver, it tends to come at a higher cost. Rural communities require dependable and affordable services, from delivering essential bills to ensuring timely birthday cards arrive at their destinations. The private sector tends to decline this type of business, making USPS’s reliable home delivery essential.
Additionally, it’s vital for the Postal Service to curtail unnecessary expenses on facilities that aren’t needed and to halt hiring new employees while dealing with a decreasing workload. Congress should consider freezing new expenditures as part of current budget negotiations. Instead, USPS can lean on private partners to assist with sorting, processing, and logistics.
The Postal Service has been around for 250 years, and while some argue it should sever ties with the government, a historical figure like Benjamin Franklin would probably have a different perspective. It’s crucial for the new Postmaster General and policymakers to ensure that USPS continues to serve Americans well into the future while learning from past mistakes.