U.S. Postmaster General Louis DeJoy faced questioning today by the Senate Homeland Security and Governmental Affairs Committee regarding concerns about the Postal Service’s current operations.
Democratic party leaders have accused DeJoy, a political donor to President Donald Trump, of slowing down postal deliveries in order to impede mail-in voting for the upcoming general election in November. A number of Democratic state attorneys general were reportedly planning to file legal action against the Trump Administration for those purported efforts. That is, until DeJoy announced earlier this week that he would delay his reforms to the Postal Service — and halt previous efforts already underway — until after the election to avoid any unforeseen impacts.
During questioning by the Senate committee members today, DeJoy again emphasized that the Postal Service “is fully capable and committed to delivering the nation’s election mail securely and on-time.” And he endeavored to reassure lawmakers that his organization would prioritize the delivery of ballots, “even in same cases ahead of first-class mail,” said DeJoy.
However, the postmaster general continued to press the financial needs of the Postal Service, estimating that for 2020, it will report a loss of $9 million. DeJoy implored Congress in his opening statement to provide financial relief to offset the impact of COVID-19 and to address what he described as the organization’s burdensome retirement and health care programs.
He also highlighted the need to raise prices on postal services. “The Postal Regulatory Commission [PRC] began a mandated review of our pricing system four years ago,” DeJoy said. “It has been three years since the commission concluded that our current system is not working.”
USPS announced late last week a price hike for parcel shipping. The temporary increase is still subject to approval by the PRC, but would be in effect from Oct. 18-Dec. 27 and would apply to all commercial domestic parcel shipping, including Priority Mail Express, Priority Mail, First-Class Package Service, Parcel Select and Parcel Return Service.
According to some estimates, a 1-pound parcel rate for the agency’s Parcel Select DDU drop-shipping service would rise by about 7.5%, from $3.19 to $3.43 per parcel. The rate for a returned parcel of the same weight would rise 7.9%. Those increases would initially hit major commercial shipping companies, who could likely pass that along to their clients: small and midsize merchants.
A number of small, medium and large businesses — including Amazon, Ebay, Zappos and QVC — have formed an alliance called the Package Coalition that has been pushing back against proposed legislation to substantially raise prices on shipping, claiming that those changes would have a detrimental impact on small business and consumers, particularly in rural areas.
However, the coalition also is supportive of preserving the Postal Service, and has been urging Congress to support Senate bill S. 4174 to provide USPS with relief for emergency needs.
The National Retail Federation, which is a member of the Package Coalition, explained to FN why the health of the postal service is so vital: “USPS continues to be a vital lifeline for small businesses during the pandemic where normal operations are limited and customers are turning to e-commerce more to get the products they need. NRF has an ongoing grassroots campaign to Save the Postal Service, so that USPS can continue to deliver information and items to keep families safe, including prescriptions, household goods, groceries and Personal Protective Equipment. Affordable shipping through USPS helps smaller retailers compete and meet their customers’ needs through e-commerce transactions.”