Editorial: Myth, Reality, and the U.S. Postal Service

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From Pitney Bowes:
I couldn’t help but think about this as I read Thomas Sowell’s attack on the U.S. Postal Service (USPS) on the website of the New York Post. His arguments are based on only the most superficial interpretations of the market for sending physical information and goods from one place to another, and it’s important that more complete analyses be heard as well.
Sowell perpetuates the myth that, somehow, privatization of postal delivery will lead to “cheaper or better” mail service. He cites the profitability of FedEx and UPS—both great companies—as evidence that the private sector would trump a government service.
Cheaper? As of Jan. 22, the USPS will charge exactly forty-five cents to send a confidential, hack-proof message from anywhere in the U.S. to anywhere in the U.S. It’s a good deal for consumers, and it’s an even better deal for businesses that use the mail to communicate with their customers or reach out to prospects. In fact, it’s about the lowest first-class postage rate of any industrialized country, and helps make the USPS a major economic engine.
Sowell might also ask executives at FedEx and UPS whether they want to take on the USPS’s duties, particularly at 45 cents per piece. The brilliance of their business models is that they have accurately segmented the mailing and shipping market, and identified those customers who are willing to pay more for the speed and transparency they offer. Sowell may not realize that even these iconic companies are increasingly turning to the USPS for last-mile package delivery in less-profitable markets.
Matt Broder
Vice President, External Communications
Pitney Bowes

2 thoughts on “Editorial: Myth, Reality, and the U.S. Postal Service”

  1. We deliver about 20-35 % of UPS and FedEx Ground Packages ( Parcel Select ) on their last mile. FedEx uses 3rd tier companies to deliver pallets of Parcel Select ( mostly Amazon.com ) packages to even small Post Offices. Our Post Office has 16 routes and about 1/3 to 1/2 the parcels are from the above. If the USPS didn’t deal with these companies they would NOT be profitable as their revenues would sink 15 to 30 %.Suck on those eggs!
    I have always wanted the USPS to stop taking the UPS and FedEX mail at the end of November and see how they would do. The Post Office should try it for a week or 2 and then pat the little guys on the head and let us ( USPS ) bail them out. Seeing as we deliver more mail in 1 day than they do in a year!
    The USPS is the lynch pin of retail mailing and if we go under SO WILL UPS and FedEX plus about a million and half jobs Talk about double digit unemployment and recession, if not a depression.
    These commentators have to say something even if they have to no real idea of what they talking about because they didn’t who would NEED THEM! Come to think of it, who needs them now!.

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