It’s hardly a report for the evening news, but Sioux Falls (SD) station KSFY reported July 14 that Lewis Drug and Hy-Vee stores would no longer be able to
“sell postage or mail packages” for the USPS by the end of September. When asked for comment, a USPS representative stated only that “the Postal Service determined that nearby postal facilities are able to serve the community.”
Meanwhile, the Postal Service reportedly is terminating contract postal units at some colleges and universities, again claiming that local USPS facilities are sufficient to provide service and that the CPUs aren’t generating enough revenue.
If these similar situations are any indication, they seem to reflect a policy first detected several months ago when the USPS ended its relationship with vendors of shipping services, then ended arrangements with package consolidators, and later barred the use of package labels that had indicia for both the Postal Service and another carrier like FedEx or UPS that entered last-mile volume. The common thread of these actions, taken under the direction of former PMG Louis DeJoy, was to remove middlemen from the transaction between the USPS and the end customer. The apparent thinking behind such disintermediation was that the customer would then do business directly with the USPS, and that the agency thus wouldn’t have to share its customers’ business and revenue.
Arguably, there are two serious flaws with such a belief.
First, it assumes – rather simplistically – that not having intermediaries would cause the end customers who were purchasing USPS services through those intermediaries to bring their business directly to the Postal Service.
Second, particularly in the case of a CPU or other vendor, it appears to conclude that it derived too little revenue from the relationship, or that it wasn’t worth the cost to manage it.
Such a policy is like a lessor who won’t renegotiate a lease with a tenant but then has the space vacant and earning no income. In both circumstances, it would seem logical that some income is better than none.
For the USPS, enabling fewer channels for access to postal products and services, limiting convenience for potential customers, and ending programs that are financially beneficial to both it and a partner provider, seems counterproductive to say the least. Again, some revenue is better than none.
Of course, in the context of DeJoy’s hubris and desire to bring everything in-house, that may have made sense but, now that he’s left, rethinking his go-it-alone policy might be worthwhile.