UPS to USPS: more financial transparency is necessary
United Parcel Service is a fierce competitor.
Now the company’s competition with the United States Postal Service is moving from the street to the regulatory arena.
In a Feb. 2 filing with the Postal Regulatory Commission, the Atlanta-based company charged the USPS needs to make public more information about how it sets rates on its competitive products.
UPS promised to file a request with the commission for a formal investigation into the Postal Service’s accounting practices.
“These problems prevent the commission, the public, and indeed likely the Postal Service itself from knowing the true costs associated with this business,” UPS stated in a 14-page filing on Postal Service’s fiscal 2014 compliance program.
“This lack of transparency is unacceptable,” UPS said.
It said a 2006 law requires the USPS to account clearly for its competitive products “to ensure” that it is not using funds from its monopoly products, such as first-class mail, to gain an advantage over its competitors.
The problem with the Postal Service’s accounting system, UPS charges, is that fully half of its expenses are listed as institutional. That means they are not linked to a specific postal product.
As a result, UPS said, the Postal Regulatory Commission is unable to determine whether the Postal Service is cross-subsidizing its competitive products in violation of the 2006 law.
It said the USPS is likely to be subsidizing because it is focusing increasingly on competitive products as the volumes of its monopoly products decline.
UPS acknowledged that a new proceeding may be needed to probe into the accounting issues.
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