Postal Service weighs serving as logistics partner for federal agencies

The U.S. Postal Service is examining how it can generate additional revenue by offering logistics services to other parts of the federal government, Postmaster General Louis DeJoy said Monday.

In a letter to members of Congress, DeJoy gave more details about how Elon Musk’s Department of Government Efficiency will assist the Postal Service’s ongoing turnaround campaign aimed at improving operational efficiency and product appeal, slashing costs and growing revenue.

Among the initiatives assigned to DOGE is developing a business case for leveraging existing infrastructure to help other agencies with logistics needs.

DeJoy said the Postal Service’s retail locations, logistics capability, delivery services, vehicles, buildings and stocking locations can help other agencies reduce costs while enhancing its own profitability. “I believe there are billions of dollars annually that will benefit us and significantly reduce government-wide costs,” he said.

Commercializing an in-house capability is something logistics companies often do in the private sector. DeJoy, who recently announced his intent to resign at an undetermined date, held the top leadership positions at New Breed Logistics and XPO Logistics’ supply chain business in the Americas before being appointed postmaster general by President Donald Trump in 2020.

DOGE intervention is needed, the mail chief said, because congressional micromanagement, meddling and issuance of conflicting requirements has handicapped the Delivering for America (DFA) cost-saving strategy started four years ago. He has repeatedly castigated Congress for requiring the Postal Service to cover its costs while being forced to expand service. 

“The fact is that DOGE is the only other game in town that seems oriented toward helping us to achieve our efficiency and cost goals that are reflected in the DFA plan, instead of parochial protectionism that is grounded in political self-interest and that is contributing to the financial peril of the Postal Service and our universal service mandate,” he wrote.

DeJoy on Thursday announced he had signed an agreement with DOGE, the Trump administration office staffed by Musk acolytes tasked with downsizing the federal government and eliminating waste. In a separate letter to congressional leaders, the chief executive officer said Musk’s efficiency team would focus on fixing structural problems with postal worker retirement plans, bringing down workers’ compensation costs and reducing regulatory strictures by the Postal Regulatory Commission that prevent modernization.

He reiterated those focus areas on Monday but said DOGE would also develop solutions for other issues Congress has failed to address. 

DOGE will review leases on nearly 31,000 post office buildings and whether they should be renewed when decades-long leases expire, considering that about half of retail centers fail to cover their cost of local operations.

Musk’s outside consulting team will also analyze how the Postal Service is combating counterfeit postage, which costs the agency an estimated $1 billion per year. The agency has implemented several technological and physical security measures, but DOGE’s creative problem-solving ability could help develop additional innovations to address the problem, said DeJoy.

He reassured lawmakers that the initiatives mentioned are the only ones he has requested and authorized DOGE to assist on so far and that only data and information required for those specific tasks will be shared. DOGE will also not be involved in hiring freezes and layoffs, as has happened in other parts of the federal government, because the Trump administration recognizes the Postal Service’s independent status within the executive branch. And he denied that DOGE’s role in postal reforms signals any attempt to prepare the agency for privatization or merger with the Department of Commerce. 

DeJoy said implementing several of the corrective measures, including changes to employee benefit accounting or the way pension assets are invested, will require legislative action. 

The Postal Service, he said, is on track to soon break even, or even achieve modest operating profits, on a continuing basis because of the restructuring effort.

Democrats not satisfied

House Democrats were not assuaged by DeJoy’s characterization that DOGE’s mission is very narrow.

“The Postmaster General is trying to rewrite history after cutting a backroom deal to turn the keys of the Postal Service over to Elon Musk and DOGE.  This letter is rife with contradictions and does nothing to assuage concerns about his ‘agreement’ with DOGE,” ranking member Gerald Connolly of Virginia said in a statement. “DeJoy cannot decry a lack of collaboration with Congress while rejecting Congressional requests for transparency and reforms.  He cannot claim to recognize the independence of the Postal Service while putting out the welcome mat for DOGE to forcefully and unlawfully implement his favored reforms behind Congress’s back and at the expense of Americans’ mail service and the agency’s independence.”

Democrats on Monday demanded the Republican-controlled Oversight and Government Reform Committee hold a hearing on the Trump administration’s and DOGE’s plans for the U.S. Postal Service, which delivers more than 115 million pieces of mail and parcels each year. They also urged Chairman James Comer to request copies of all signed agreements DeJoy made with DOGE and the General Services Administration, saying recent administration statements and actions constitute a “broad assault” on the Postal Service’s independence.

“We agree that there are steps Congress could take to strengthen the financial sustainability of the Postal Service, but any potential deal that would give Elon Musk and his DOGE associates unilateral authority to manipulate the most critical, expansive national mail network on the planet is deeply troubling. Such an agreement signed between the Postmaster General and DOGE associates would threaten access to affordable and reliable postal service for millions of American families and businesses,” the minority members said.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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