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The USPS should not be picked apart
I too take exception with Mr. Jeff Jared’s recent column on privatizing the United States Postal Service (USPS). It is a constitutionally mandated service – which can be run efficiently under a service model but not a for profit business model … and why should it run under a business model? A business model can pick and choose its products/delivery routes and set its own rates. Unlike UPS or Fed Ex, the USPS cannot pick and choose where it will deliver services. This does not mean that the USPS cannot reinvent itself to provide additional services in different ways. One barrier is of course the number of Congressional regulations and mandates that constrain change in the USPS.
Comparing the breakup of the USPS to AT&T divesting itself of the “Baby Bells” and assuming that would bring more choice, better rates and better service is very misleading. AT&T did break up into many “Baby Bells.” But with acquisitions, mergers and name changes these companies are now consolidated into three major regional companies (very difficult to figure this out). However, my land line service will still be provided by the regional company that has the monopoly in my area. Interestingly, since the divestiture AT&T has actually bought back one of the Baby Bells – Bell South.
Comparisons between the USPS, UPS and Fed Ex are difficult to make because each operates so differently. UPS is a for-profit company whose employees are unionized. It sets its own rates and routes. My understanding is that most UPS employees work their way up through the company (like the post office).
Fed Ex is actually a for-profit airline! And so it falls under different federal rules and regulations. The pilots are Fed Ex employees and are unionized. Fed Ex deliveries to your home and business are made by self-employed contractors. These delivery contractors do not work for Fed Ex. They do buy their routes, trucks, and paint to paint the trucks etc. If a route is not profitable Fed Ex does not deliver there. In areas where Fed Ex chooses not to go it contracts with the USPS to deliver its mail.
The Post Office actually makes deliveries for Fed EX!
The USPS cannot be compared to the German postal service. Germany did privatize its postal service, but Germany continued the monopoly on mail delivery under an international company (DHL) – so there is no competition there either. What Germany did do is place more postal services in more private locations through out the country – with better hours, more services, some even being 24 hour service. The German rates are also about twice the USPS rates. The German mandate is in a country a little bit smaller than Montana. The USPS is mandated is to deliver to everyone across 5.6 million square miles.
Mr. Jared states that “The USPS loses to private companies in every area except routine mail where it has its protected monopoly.” That is not true and I used the websites of the USPS, Fed Ex and UPS to make comparisons between the three. Using the same criteria: no insurance, cheapest ground rate, same size box, same poundage, from a Kirkland ZIP code to an East Coast ZIP code - I “mailed” the box.
According to the USPS website, the cost to mail a 40 pound box ground would be: $42.98.
The Fed Ex ground quote is: $49.51.
The UPS Ground quote is $57.67.
Clearly the USPS can compete with Fed Ex and UPS.
The USPS should not be picked apart (like vultures picking apart a dead animal) into so many parts that eventually there will be no postal service, which is basically a business model for taking apart a private company – and that is where this is all headed … unless the public steps in before it is too late.