PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Is the USPS up to the Task for the 2020 Holiday Season?

By at 23 November, 2020, 11:39 am

By Karen Kerrigan-

The 2020 holiday shopping season and year-end predictions show that online retail is set to experience sensational growth this year. Market research firm Forrester predicts that it will grow 18.5% to reach 20.2% overall penetration in North America. Additionally, Deloitte’s slightly more bullish predictions see holiday retail sales growing between 25% and 35%, reaching $182 billion to $196 billion in total.

Small business owners who are struggling financially due to the pandemic have worked hard to pivot to ecommerce in order to boost revenue through online sales. A survey of 6,325 small-business owners found that 42% were at risk of going out of business in the fourth quarter. For many retailers, the success of their online holiday sales efforts could be the determining factor in whether their doors stay open or shut for good by year end. To take advantage of the surge in online sales, small businesses obviously need a dependable, cost effective method to ship their products.

One option is to turn to the U.S. Postal Office, whose mission is to provide America with “reliable, affordable, universal mail service.” Unfortunately, USPS appears ill-prepared for an unprecedented wave of holiday activity. On the financial side, USPS owes a staggering $160 billion. In terms of reliability, it has regularly failed to meet its delivery standards for the past five consecutive years. The pandemic has also taken its toll by sidelining an estimated 5.5 percent of the Postal Service’s workforce.

Small business watchdogs like SBE Council have expressed much hope for improved transparency about the viability of USPS operations in the months and years ahead. However, according to recent in-depth reporting by the Washington Post,  deep-rooted challenges continue to go unaddressed.

The Post’s exposé includes USPS internal documents from early 2020 – most of which involve communications between postal leaders about key challenges, along with a review of the state of the organization as former Postmaster General Megan Brennan prepared to retire in May 2020.

While the depth of USPS’ concerns were made clear, the trove of documentation showed little in the way of clear-cut solutions or a strategy for dealing with the financial and operational mess. Lawmakers on Capitol Hill and stakeholders were hopeful that USPS might develop a forward-looking plan that could set it on a clear course for financial and operational stability. Such a plan would steer the USPS to improvements in customer service, while also generating enough revenue to independently cover its costs – much like any traditional business or organization.

Instead of outlining a new strategy, USPS priorities for the first half of 2020 were specifically focused on how to achieve a government cash infusion, in addition to forgiveness of its massive debts. Specifically, USPS wanted $50 billion in grants for upgrades to facilities and equipment, and to cover potential future losses.

As the SBE Council previously noted in June 2020 when new Postmaster General DeJoy took command, the USPS needs meaningful reform, not the massive bailouts that were prioritized by previous postal leaders.

There will be a crush of packages making their way into the system during this busy holiday season, and especially so given COVID-19. Small businesses are looking for reasons for optimism, and they are hoping their customers’ packages will get delivered on time. For many businesses that have managed to hang on during COVID-19, a successful holiday season will be the make or break for many. A successful USPS that delivers reliably is a critical piece of the commerce ecosystem that absolutely must deliver for small businesses this holiday season.

Successful entrepreneurs, and small businesses generally develop a clear strategy to compete and thrive in an every-changing markeplace.  The USPS must be required to do the same given its importance to consumers and small businesses.

To put the USPS on the right track – one that does not include regular trips to Capitol Hill for taxpayer bailouts – Postmaster DeJoy will have to steer this massive entity into financial stability while at the same time navigating the core changes and challenges that have disrupted our economy during COVID-19. Now more than ever, USPS needs a realistic and transparent operational plan to successfully climb out of debt and effectively serve small businesses and their customers in the future.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

 

 

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