We Need The U.S. Postal Service To Deliver For Small Businesses—And Our Economy
Rhett Buttle • August 25, 2020
AFP via Getty Images
On Saturday, the House of Representatives voted to approve legislation to block recent operational changes at the U.S. Postal Service and grant $25 billion in emergency funding. This morning, as Postmaster General Louis DeJoy follows up his Friday Senate testimony with another round of questions from the House Oversight and Reform Committee, America’s small businesses should be top of mind. Under DeJoy’s short tenure, the U.S. Postal Service has implemented several changes—including new restrictions on overtime hours, fewer trucks on the road, and the removal of mail sorting machines and collection boxes across the country—that have resulted in a “crippling backlog”
of mail. And small businesses are paying the price.
A strong postal service is crucial to our economic recovery post-Covid-19. Without it, small businesses—the backbone of our economy—cannot innovate and adapt to this new reality. These businesses are a vital customer for the USPS: According to the agency’s own data, in 2013 small businesses generated $9 billion
of revenue for the USPS—about 14% of its annual operating revenue. Small businesses are part of what enables the USPS to generate an average of $236 million in revenue each day, all while only one percent of its annual budget is subsidized via federal appropriations.
Small businesses, in turn, rely on the U.S. Postal Service. A 2019 report
found that 70% of microbusinesses (fewer than 10 employees) had utilized the USPS within the previous six months. During the pandemic, the USPS has become even more crucial. In a May 2020 Harris poll, Americans ranked the USPS as the most “essential” company amid the COVID-19 pandemic. With most of the nation stuck at home, between April and June of this year, overall package volume increased by about 50%
from last year. Savvy small business owners have pivoted to digital
storefronts as brick-and-mortar shopping continues to be complicated, if not impossible. And these newly online merchants depend on the speed, reliability and cost effectiveness of the USPS.
Now, these businesses—already battling to stay afloat—can’t even rely on the mail. Recently, the National Small Business Association polled its members and found that 60%
have experienced serious shipping delays through the USPS. These delays deliver yet another blow to small businesses that are doing everything they can think of to survive this crisis.
While Fedex, UPS and other private carriers offer an alternative, they’re typically not as cost effective
for small businesses operating on thin margins. This makes it even harder for Mom and Pop shops to compete with big box stores—particularly Amazon, which has its own shipping service. Anecdotally, some small businesses have even had to lay off workers
to make up for increased shipping costs over the last couple months.
Even with all the media attention on postal service delays, consumers—who have become accustomed to faster and faster delivery
over the last several years—are likely to blame businesses themselves for late shipments. Small businesses that are the most vulnerable, such as those that are micro-sized, located in rural areas or owned by women or minorities, will feel the most acute impact. In fact, online retail marketplace Etsy recently wrote an open letter
encouraging Congress to provide emergency funding for the U.S. Postal Service. Ninety-one percent of Etsy’s 2.8 million sellers use USPS to ship their products to consumers—83% of them are women-owned, sole proprietor businesses, and they will suffer greatly from a continued backlog in package delivery. With so many Americans out of work or subject to reduced hours, these extra income streams are more important than ever.
It’s not only the small business-consumer relationship that’s impacted by the slowed operations of the USPS. Small businesses also depend on regular mail delivery for paychecks, important paperwork, goods and supplies and mail-based advertising. As these items are delayed, costs for small business owners will increase. For example, checks arriving late to vendors mean small businesses may have to pay late fees, or even check cancellation and bank wire fees if checks are lost in the mail.
Fortunately, in a a bipartisan vote on Saturday—with 26 Republicans joining the Democrats—the House approved $25 billion in emergency COVID-19 funding to keep the USPS afloat, as well as create a process to plan for the long-term solvency of this vital public service. Obviously, the stakes are high. We have veterans awaiting
their prescription medication, half a million seniors facing
delayed Social Security checks and the possibility that mail-in ballots may not arrive
in time for the upcoming presidential election. All of these items are crucial to the well-being of our nation.
If we hope to recover from the pandemic-related downturn, it’s also crucial that we bolster small businesses with all the support they need—from capital to workforce protection to, yes, a viable and efficient postal service.
This piece originally appeared in Forbes on August 24, 2020. You can view it online here.
Rhett Buttle is the founder of Public Private Strategies, Executive Director of the Small Business Roundtable, Founder of the NextGen Chamber of Commerce, a Senior Fellow at The Aspen Institute, and a contributor for Forbes.
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Rhett Buttle, Founder and CEO of Public Private Strategies, joined Rahel Solomon on CNN to talk about trade policy and the impact of tariffs on small businesses. Watch the full interview here or below.
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