The Postal Service is hobbling along and trying everything to stay in business. However, some are calling for it to be privatized – giving it the freedom to innovate and compete with other companies like UPS, Fedex, and even Amazon.

Not surprisingly, powerful postal service unions are balking at these recommendations along with their liberal friends in Congress. However, some on the left are defecting and smelling the coffee on the USPS’s future. The Brookings Institute published a new paper making the case for privatization.

The problem for the postal service is technology. The electronic-age has relegated printed mail to the dinosaur exhibit of the museum. These days most people only get supermarket circulars, credit card offers, magazines, and the occasional retail store coupon in the mail. You may still get a stamped wedding invitation or birthday card, but even those are disappearing as senders opt for electronic communications.  But the USPS has yet to get a handle of its costs despite the changes in demand for its services. First-class mail pieces has dropped from 45.9 billion pieces in 2005 to 22.6 billion pieces in 2013.

The USPS wisely managed to overhaul package delivery with services like flat-rate shipping on boxes and envelopes of various sizes – making it the most profitable arm of the postal service. Online shopping has boosted the package volume. We’re less than two months away from Black Friday and Cyber Monday – the biggest (online) shopping days of the year. However, that’s not enough to keep it afloat. In recent years, the postal service has cut Saturday delivery, consolidated and shut down locations, and downsized its workforce, but that’s still not enough.

The left-leaning Elain Kamarck at Brookings thinks the solution is to sell of the packages arm of the postal service while the government would continue run the rest of the mail service. In addition, other services could be added such as banking and bill paying. I wouldn’t mind picking up a roll of quarters for washing from the post office while I purchase stamps. There’s plenty of room for the post office to innovate.

The Washington Post reports:

If the USPS were a purely private entity, the changing shape of the marketplace wouldn’t necessarily pose an existential threat,” Kamarck wrote in an essay made public last week, “Delaying the inevitable: Political stalemate and the U.S. Postal Service.”

“They could shrink the infrastructure created to deliver first-class mail and increase their capacity to deliver parcels,” she writes, “a logical adaptation to the changes that have come about as Americans have moved from paper to the Internet.”

The idea of selling off any part of the government agency for which Benjamin Franklin first served as postmaster general has drawn fierce opposition from Democrats in Congress and the still-powerful postal unions. Others say it would be politically untenable.

But Kamarck and others who favor privatization argue that the post office’s existence in a “never-never land” that is “not fully public and not fully private,” stifled by laws and saddled with a “governance structure that impedes innovation,” now requires that the country’s second-largest civilian employer after Wal-Mart be broken in two.

“What really should happen is that Congress needs to fix the Postal Service,” Kamarck, founding director for the Center for Effective Public Management at Brookings, said in an interview. “But they don’t want to deal with it. They’re allergic to it.”

Postal officials rejected the proposal. In a statement, Toni DeLancey, the Postal Service’s senior manager for public relations, said, “The idea of separating and privatizing the package delivery business, which has been growing by double digits for the past several years, is poorly conceived at best.

“At worst, and aside from being politically and economically unrealistic, the proposal aims to shift an enormous financial burden onto taxpayers, which is unnecessary and unwanted in any policy context.”

We shouldn’t be surprised at the ardent opposition of the unions. They don’t care about competition, creating better choice and services for customers. They just want money and power. Plans to reform the Post Office, they fear, would erode that control.

Like many industries that have held comfortable market monopolies, technology and innovation is now bypassing them, taking the customers that they held hostage along with them. That doesn’t sit well with the establishment. For too long they have gotten by doing the bare minimum with no competition. They lobby lawmakers to secure special treatment and protections in the law.

Technology is changing all of that. Now that they are forced to innovate, they throw their hands up and fight meaningless battles instead of doing what entrepreneurs and businesses should do in a free market: compete or else. In the end the consumer wins as prices decrease and options expand.

Mail delivery is no different. It’s time for union and liberal stalwarts to either support or move out of the way of innovation. Nothing is stopping progress and they can either be part of or get left behind.