United Parcel Service (UPS) is helping educate thousands of its workers in and around its airhub in Kentucky, according to an article that recently appeared in The Washington Post. This, the Post writer noted, benefits the local community, the state, and UPS. The irony, however, is that in an age when the Postal Service is blasted at every turn for its "unequal" standing in the marketplace vis a vis the private sector, nothing ever gets said about the Postal Service's inability to offer such largesse to states and locales. Almost one year ago, the AMMA Bulletin published a postal perspective by AMMA Public Affairs Director Chad Robbins on this same issue. It is reprinted here in its entirety.
As United Parcel Service (UPS) and other private sector interests square off against the U.S. Postal Service (USPS) in an effort to prove the agency maintains distinct competitive advantages over private sector competitors, some industry observers can't help but feel torn. The question is, when the public relation mavens and coalition-forming kingpins exit stage left, who'll be left feeling like the fool? Quite possibly it'll be those who buy that either side has a competitive advantage, since each has distinct perks.
The Postal Service travels about Capitol Hill trying to convince legislators to loosen the agency's regulatory reigns so it can operate more like a business. At the same time, one can find a Postal Service lawyer arguing fervently in appeals court that the Postal Service is a federal governmental agency and, as such, is not beholden to the laws regulating businesses.
Meanwhile, United Parcel Service and others charge that the USPS abuses its monopoly and takes advantage of its quasi-governmental status; as when Big Brown recently charged that the Postal Service uses its First-Class letter mail monopoly to subsidize international mail. And competitors generally contend that the Postal Service enjoys numerous advantages, including not having to pay taxes or toil under regulations promulgated by federal agencies.
But, when balancing the advantages enjoyed by a corporation over those of a governmental agency, one wonders if either side really maintains an "unfair" advantage.
UPS, for instance, has its own brand of advantages: most of which its competitors, particularly the Postal Service, do not enjoy. For example, Louisville, Kentucky is home to one of the company's largest air hubs. UPS, according to The Wall Street Journal, lobbied the state for an incentive package which included $120 million in tax breaks. The company also was reportedly responsible for lobbying local officials to push through a $700 million expansion of the Louisville Airport.
Additionally, after considerable pressure, Kentucky's Governors helped create "UPS University," which made possible the recruitment of the thousands of college workers desperately needed by UPS to man its expanded air hub. At the proposed university, students would live in specially designed dorms allowed them to sleep during the day, attend classes taught by professors from the University of Louisville in the evening, and then go on to their jobs on the night shift at UPS' air hub.
Ultimately, UPS handed Kentucky a three-inch thick volume of 'requests' including $300 million in incentives, the overnight university, a reduction in the city's jet-fuel tax, and a $100 million cash grant.
These are advantages the Postal Service does not enjoy. It can't lobby local and state governments for special tax breaks or make deals for educational perks for its workers, or any of the other quid-pro-quos enjoyed by private businesses. Conversely, it's true that the Postal Service doesn't pay parking tickets or face continual regulatory compliance as private entities must although on balance, the USPS alone labors under equally costly and confining federal statutes designed to protect, among other things, its employees' free speech and due process rights.
In the end, Congress should better define the bounds within which the Postal Service must operate, cutting the ties that bind it and those that leave competitors at a disadvantage. But, if UPS et al. welcome competition as long it's on a level playing field, clearly both the Postal Service and they are going to have to give up some ground.