President Trump has threatened to block federal aid for the U.S. Postal Service unless it raises shipping rates for online companies. We agree. And go a step further urging a monetization of USPS significant real estate assets.
The USPS has been in the spotlight in recent years due to the dramatic and ongoing changes affecting the industry and the change in way customers consume information. In other countries too, liberalization of the European postal market and other pressures from alternative means of communication are forcing operators throughout the world to consider innovative ways to raise funds and improve balance sheets by rationalizing asset bases. In many countries the postal agency is the largest owner of real estate in a country, thus requiring an effective real estate strategy – but is seldom implemented. Postal operators around the world have already publicly announced their intention to close and monetize post offices in large numbers or are developing strategies to manage their existing portfolios.
Between 2007 and 2018, the Postal Service has experienced net losses totaling $69 billion and around $9 billion in 2019. Americans are mailing fewer and fewer First Class letters and USPS generating less revenue and cannot cover its operating costs. Declines in mail volume and the costs of its pension and health care obligations will continue to rise further exacerbating costs. USPS should get out of the real estate business.