Tuesday, March 30, 2010

PRIVATIZED MAIL DELIVERY – SURELY WE CAN AGREE ON THIS?

You may have heard that the US Postal Service has requested that Americans' mail service be reduced from 6 days a week to 5 days a week, with Saturdays being the chosen day for elimination. Congress must ultimately approve this step, and it is provoking some much-needed discussion about potential privatization of mail services in the United States. In a country full of abundance and plenty – to say nothing of rapid technological innovation – only a system owned and operated by the government would be taking such a significant step backward. Our grandparents got 6-day mail. Our parents got 6-day mail. We will be left with 5-day mail, thanks to an inability for the US Postal Service to compete with private firms and to proactively steel itself for, and reactively respond to, the massively disruptive online technologies of the past 15 years.

I believe that we’re all better served by repealing the USPS monopoly as soon as possible, and by letting consumers and businesses choose how they’d like to consume mail services going forward. Perhaps you’d like to only get snail mail and packages two days per week, and then only from FedEx or UPS or some new competitor who would likely spring to life if the USPS monopoly wasn’t standing in their way. Maybe businesses would pay a little extra to send mail all 7 days, or might even start their own private mail delivery services if their size & scale warranted it. With the lid off, we will see an innovation in mail delivery such as we’ve only seen when FedEx and UPS were allowed to compete with the US Postal Service for package delivery. Extend that to regular mail, and all of a sudden you’ve got true consumer choice, and likely lower prices to boot.

There will be a ton of howling when Saturday delivery is eliminated in coming months. Rather than just take it, let’s agitate for one small bit of private sunshine in an increasingly monolithic, “public” America.

7 comments:

Sean said...

Our grandparents got twice a day mail delivery if they lived in an urban area.

You are right that the only necessary step is to end the government enforced monopoly on first class mail delivery and let competitors flourish. Maybe some companies would be local or regional outfits, some would deliver only bulk (aka Junk) mail, and some would try to compete directly with delivery of private letters and packages.

I am not sure how much howling there will be, other than from the Postal Workers Union. With email, smartphones, fedex and/or UPS, if someone needs to get in touch with me or get something to me, they can.

Shawn said...

Sorry Jay. I'll be your dissenter again.

My brother-in-law used to gripe about this a lot in the 90s, but I like that I can scrawl an address on an envelope in my bad handwriting (no forms to fill out), affix a $0.44 stamp on it and drop it in a box, with the confidence that it will arrive at the intended destination within a few days. I've had maybe one letter go AWOL in my whole life, which beats my experiences with UPS and FedEx.

A few years ago I mailed a post card from overseas to a girl in Arizona without knowing her address. I scrawled something like "the right-hand door of the gray house on the corner of such-and-such and so-and-so" as the address, and it arrived in her mailbox within a week or so. My brother recently sent me a walking stick that he carved. He wrote my address directly on the stick with a sharpie and affixed some postage (no box or other packaging). No problem. I got it in four days.

Our grandparents may have gotten mail delivery twice a day, but they also didn't get email delivered a gazillion times a day. If I want someone to get something immediately, I don't send it by post. Full stop. I for one don't really care about Saturday delivery.

Postal delivery is not on my list of things that need to be fixed, because I don't consider it broken. I think $0.44 is a bargain for the level of service I get from the USPS.

Of course, in fairness to you, I can't know that a superior competitor would not emerge if given the chance. I'm just saying I'm a satisfied customer - a fan even - of this particular status quo.

Shawn said...

I'd just like to make the additional point (or emphasize my final point I suppose), that I'm only speaking for myself as a satisfied customer, and I think the USPS gets a worse rap than it really deserves.

There are of course lots of other possible ways that people and businesses might prefer to use post, and a free market system should be allowed to address these

I would just be sad to see some aspects of the current system go away (see my comment above for some examples), which they likely would under competitive pressure.

Jay said...

Hey Sean and Shawn, thanks for responding. On Sean's first point, about people not howling - you know, I think what people will get upset about is no Amazon.com, eBay, Zappos etc deliveries on Saturdays - to say nothing of Christmas time deliveries. Most of us will be OK not getting snail mail or junk mail on that day.

Shawn, I think the current system of 44-cent letters and surprisingly efficient deliveries will only get cheaper and more efficient under true competition, once a winner/set of winners emerges. It's hard for me to imagine the government having a monopoly on great service; in fact I just got a little bit short of breath when I typed that sentence.

Shawn said...

Yes, privatization of the postal service could very well make things cheaper and more efficient. I'm also afraid it could result in entrenched, sub-par, local monopolies like we have in telecom and utilities. Or more likely, the kind of shitty, overpriced faux competition we get from airlines, mobile phone providers and health insurance companies.

Right now the system might not be as good as it could be, but it's not totally broken either. I don't like the idea of another industry delivering bare minimum service due to fictional constraints invented by highly paid lobbyists, all designed to ensure big profits for a few connected execs.

Sean said...

I don't like the idea of another industry delivering bare minimum service due to fictional constraints invented by highly paid lobbyists, all designed to ensure big profits for a few connected execs.

This is the real world problem with my philosophical belief in privatization. My fear is that rather than letting the Post Office sink or swim on its own, it would be sold off and the 'investors' coupled with the union would be a formidable lobbying force so that while one government hand was stripping away protections another government hand would be restraining competition.

sean said...

Check out Megan McCardle's thoughts on the Post Office:

http://www.theatlantic.com/business/archive/2010/04/things-are-worse-at-the-post-office-than-i-thought/38356/