Recent postal reforms will go a long way toward putting the U.S. Postal Service back on a sound financial footing, says Kevin Yoder, head of the postal advocacy group Keep US Posted. But there’s more to be done to keep the Postal Service healthy.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Kevin Yoder is a former congressman who now serves as executive director of Keep US Posted, a broad-based advocacy group that believes that a reliable, affordable U.S. Postal Service (USPS) is essential to our way of life and should be protected.
From 2011 to 2019, Yoder served his Kansas district in the House of Representatives and was the youngest Republican appointed to the House Appropriations Committee. He also chaired the Homeland Security and Legislative Branch subcommittees and served on various other committees, including the House Steering Committee. He was deputy whip for the House GOP and vice chairman of the National Republican Congressional Committee.
Yoder has an undergraduate degree in political science and English as well as a J.D. from the University of Kansas. He recently was a guest on DC Velocity's Logistics Matters podcast, where he spoke with Group Editorial Director David Maloney about postal reform.
KEVIN YODER
Q: What is the role of your organization, Keep US Posted?
A: Keep US Posted is a new organization that we created last year out of concern among Americans—both folks in business and industry and ordinary citizens—that Congress wasn’t paying enough attention to Postal Service issues.
For a long time, Congress has been putting off dealing with the issue of postal reform, which has led to problems with the budget and operations of the Postal Service. We know the Postal Service is one of America’s most trusted institutions. It has been around since the country’s beginnings—the Constitution even states that Congress has a responsibility to manage and maintain the Postal Service. So, it is a critical service that delivers to 161 million addresses daily, and it is the only carrier that is required to deliver to every address no matter how remote and how rural.
We saw a disconnect between what we think Americans value and expect, which is a well-funded, efficient Postal Service that delivers on time and keeps cost down, and what Congress was actually doing. So, we started Keep US Posted to give those Americans who care so deeply about the Postal Service a way to have their voices heard in the halls of Congress.
Q: Congress recently passed the long-awaited Postal Service Reform Act with very high bipartisan support: The vote was 79–19 in the Senate and 342–92 in the House. As a former congressman, does that surprise you given the current political climate in Washington?
A: Well, it does, but it probably shouldn’t—and that is because this is an issue that affects every district in the country. The issue of postal reform has been simmering below the surface in Congress for a long time. When it finally did hit the floor, you saw majorities from both political parties voting for the bill. The last time a Postal Service reform bill passed Congress was in 2006, so it took 16 years to get this done.
I think part of the success was due to the intensified focus on the Postal Service in the last few years. The other part of this was that it just came at the right time. Congress, as you recall, had been working on the Build Back Better bill and a number of different measures without much success. I think that Congress was looking for something that it could herald as a bipartisan achievement. So, up pops the Postal Service Reform bill at the right time, and the House passed it really easily. We didn’t know how long the Senate might sit on it, but I think majority leader [Chuck] Schumer was looking for something to show that Congress was still working while members were stuck on other issues. So, it all came together at the right moment.
Q: I know the legislation repeals the mandate requiring the prefunding of retirees’ health benefits. Can you explain how the bill changes the financing equation and talk a bit about other significant parts of the legislation?
A: First of all, the prefunding issues are very significant issues. The 2006 postal bill required the Postal Service to prefund its retirees’ health benefits 75 years in advance. No other federal agency or entity in this country has that sort of heavy burden, and the USPS simply wasn’t able to make those budget numbers work. So, getting that off the books was a huge win.
The second thing the new reform bill will accomplish is to move the retirees into Medicare as opposed to a separate health-care system. Those retirees have paid into Medicare all of their lives anyway, so taking that off the Postal Service’s books lifted another huge burden.
Then there are some other significant issues related to service responsibilities such as six-day delivery. There have been efforts in recent years to cut deliveries to five days a week, but the new measure maintains current service levels.
It also requires that mail and packages continue to be integrated. There have been some efforts from outside carriers to push the Postal Service to change that integration.
So, what you see here is a series of reforms that take some very significant burdens off the books and create some internal efficiencies by moving mail and packages together.
Q: How long will it be before we begin to see some of these reforms enacted?
A: Well, we should immediately be able to take some of these burdens off the books, and the Board of Governors of the Postal Service ought to have much more clarity on their budget. I will tell you, some of the concerns we have going forward are how Americans will view the Postal Service once it starts to turn a profit and move into the black.
Postmaster [Louis] DeJoy last year rolled out a 10-year plan in which the USPS is projected to raise postal rates significantly—putting through higher percentage increases than we’ve ever seen before. It has also begun to ratchet down the delivery times for mail, so a first-class piece of mail used to be “on time” if it was delivered in one to three days. Now, that is five days, so we are seeing services reduced and we are seeing costs go up.
Our big concern and our hope is that the benefits and savings resulting from these reforms will be passed on to the American people by keeping rates down and improving service. If we don’t see that, then I think a lot of members of Congress and others will be frustrated that we pushed through all those reforms but they didn’t lead to benefits that were tangible to the American people.
Q: Those rates are still low compared with a lot of other countries and, of course, the Postal Service was set up to deliver letters and business correspondence, much of which has now shifted to email. So, you have a model that is basically built on a service that people aren’t using anymore. That has forced the Postal Service to move more toward a parcel and package delivery model. How has that shift affected what we are seeing with the reforms?
A: Well, certainly the Postal Service has to continue to move with the times, but I think one of the things we saw, particularly during Covid, is how much the American people still rely on the Postal Service for their daily needs—whether it’s correspondence like cards and letters, financial documents, or medicine. We saw a lot of discussion about election ballots being moved via the mail, and more recently, the Covid-19 tests were all sent through the mail.
We know that this is something that Americans still view as a critical service, and revenue was actually up during Covid. We see more mail moving and people making more use of the Postal Service. We think that the Postal Service ought to build on that success, and that, rather than be defeatist and say that people just don’t send mail anymore, we should continue to try to make the Postal Service relevant to the American people’s lives.
However, what we are seeing are projections showing mail declining by 42% over the next 10 years. We think that is partly because of rates going up to historic levels. We’re concerned that rising rates together with reduced service levels will mean that the American people see less value in using the mail and may turn to other methods.
Getting postal reform passed is certainly important, and it helps us reshuffle the deck here, but to keep the Postal Service strong and relevant in the minds of the American people, additional reforms will have to be enacted. So, we have a lot of work to do.
Q: What will your organization, Keep US Posted, do to work toward that?
A: We think that maintaining a solid customer base for the Postal Service is key to keeping it on a strong financial footing. The Postal Service receives no taxpayer funds. It truly relies on stamp revenue and postal revenue for each parcel that’s put in the mail. We want to make sure that the system continues to be effective and efficient, and that the Postal Service doesn’t make changes that could alienate its customer base.
So, we are working toward making sure that the USPS continues to be a strong, well-run entity and that it delivers under budget and on time for the American people each and every day.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."