Even as the USPS has ramped up a demo project to delivery groceries with Amazon in a few cities and made a deal to deliver some parcels for certain retailers on Sunday, the USPS is scaling back delivery standards for core customers, the folks who pay their bills, first class mail customers.  While we support comprehensive postal reform that will allow the agency to right-size its massive structure, shrink its workforce, outsource many of its functions to private sectors actors who can do it as well or better, and close and consolidate postal facilities, there are a lot of cost-allocation questions that remain unanswered.  Regulators shouldn't be allowing the USPS to strike off in any direction, especially under its current, unreformed operational structure, which has been dubbed a "broken business model" by the Government Accountability Office (GAO).

Fresh off the presses at the GAO), today's report documents the slippage.  As a first-class mailer, you may have already started to notice the slower service.

The costs and the revenues associated with the new grocery delivery experiment are being kept under wraps by the Postal Regulatory Commission, as well as the Sunday parcel delivery program.  In fact, all of the USPS's cost allocations are a bit dicey, which ought to make all stakeholders sit up and take notice, maybe demand the release of the details of the grocery deal and the Sunday delivery deal.  In this case, the PRC greenlit the two-year grocery delivery experiment claiming that it will not cause market disruption and does not constitute an unfair competitive advantage.

Question for the PRC:  Before you permit the USPS to dive into new private sector businesses, have you verified without a doubt that the USPS is correctly allocating its overhead costs and not unfairly undercutting its private sector competitors.  Are first-class mailer subsidizing these new ventures, which benefit a select number of big retailers?

And while they are trolling for new competitive ventures, chasing new sources of revenues, there has been talk of allowing them to get into...BANKING!  Talk about Halloween Horrors.