In 1860, three well-heeled gentlemen believed that there was a need for fast, reliable mail service between the1966 miles separating St. Joseph Missouri and Sacramento California. On April 3, 1860 they initiated this service via the new Pony Express. In ten days or less, changing riders each seventy-five to one hundred miles, they traveled through the states of Missouri, Kansas, Nebraska, Colorado, Wyoming, Utah, Nevada and California. The three investors (Mr. Russell, Mr. Majors, and Mr. Waddell) invested over $700,000 to fund the company. It sounds like a promising venture, doesn’t it? Unfortunately two things went wrong for them. They failed to get the US Government contract for delivering mail, but more significantly, telegraph lines were run coast to coast, eliminating most of the market for the Pony Express. Technologically obsolete, just eighteen months after initiating service, in October 1861 they were $200,000 in debt and the company sold on the auction block.
Now, one hundred forty years later, do you know who the third largest employer in the US is? It’s the United States Postal Service, with 730,000 employees; it is only exceeded by the United States Defense Department and Wal-Mart. As our world of communications has changed so drastically over the past few years, similar to experiences of the Pony Express, it’s time to rethink the mission and size of the Postal Service.
The relationship of the Postal Service and U.S. Government isn’t clear to most people. The Postal Service was created in Philadelphia under Benjamin Franklin on July 26, 1775 by decree of the Second Continental Congress. Based on a clause in the United States Constitution empowering Congress "To establish Post Offices and post Roads," it became the Post Office Department in 1792. In 1971, the department was reorganized as a quasi-independent agency of the federal government and acquired its present name.
The USPS is legally defined as an "independent establishment of the executive branch of the Government of the United States," as it is wholly owned by the government and controlled indirectly by the President. As a government agency it has many special privileges including sovereign immunity, eminent domain powers, powers to negotiate postal treaties with foreign nations, an exclusive legal right to deliver first-class and third-class mail, and exclusive use of private mail boxes. It is interesting to note that, to prevent competition, the USPS mandates that competitive deliveries must charge a higher minimum rate.
While the Postal Service was initiated with laudable aims of providing an affordable, reliable source of communication for all Americans, in the last few years that world has changed drastically. Private companies such as DHL, FedEx and UPS have largely taken over the routine delivery of packages and time-sensitive documents and packages. Faxes have allowed documents to be delivered in seconds. The advent of inexpensive phone service and cellular phones have allowed voice communications and instant messaging, eliminating the need for most personal letters. And the granddaddy of communication breakthroughs, the Internet, has largely taken the place of business and personal communications via e-mail, online banking for paying bills, and online shopping. The latter has eliminated the necessity for sending most brochures and catalogs to individuals or companies since online shopping is so practical. Consequently, our “paperless society” has much less need for the Postal Service. Since 1998 first class mailings are down by eleven billion pieces per year.
Where does the current environment leave the Postal Service? Primarily it delivers bills, invoices, and mass mailings which many of us consider junk mail. What is the timeliness factor for these remaining posts? The great majority of time-critical transfers occur electronically or via expedited service of the alternative private companies (e.g., FedEx, UPS). In order to stay in operation in today’s world, the people working the counter at post offices are compelled to try to sell additional services such as proof of delivery, extra stamps or faster delivery (want to super-size that?). In spite of this, postal rates continue to rise.
Does this mean we don’t need the Postal Service? No, we will continue to need inexpensive yet reliable ways to get routine items back and forth for all of our residents. But do we need to have the third-largest employer in the US providing us this service daily? The Postal Service needs to rethink its current mission: routine, low-cost transfer of nontime-critical items. It can meet these needs and greatly reduce expenses. For example, what if deliveries were only made on Monday, Wednesday and Friday? Would one-day delay of delivery affect the needs of most users? Would the consequent halving of the number of man-hours required for delivery cut costs? Significantly. Maybe even twice-a-week delivery would be adequate.
In these days of expensive energy prices, just the fuel usage changes from such a move would be significant – both from an economic and environmental aspect. The USPS claims that a 1% change in fuel prices makes an eight-million dollar annual difference in fuel costs. Extrapolating this, if fuel usage for deliveries were cut in half by cutting delivery days, and figuring that just half the total USPS use of fuel is for local deliveries, the savings would be upwards of two hundred million dollars per year. That would be not only environmentally friendly but would reduce the huge US demand on precious fuel by about sixty-six million gallons each year.
I don’t think most patrons would mind if the Postal Service raised rates on mass mailing either. Few people are excited to get mass mailings. By raising the rates on these mailings, the Postal Service could still maintain revenue. The total volume of mail would decline and revenue per delivery would rise while eliminating some of the marginally justifiable mass mailings. These days many people are also concerned about the security of items coming and going in their mail boxes. What if they were provided the no-cost option of either having a mail box or a post office box?* This would lighten the loads of the postal carriers as well, and if the enticements were attractive enough, entire routes could be eliminated.
By cutting costs in ways such as these, postage rates could be significantly reduced, allowing the Postal Service to fulfill its modernized mission most efficiently. It’s about time to recognize the impact of technology on our Postal Service, and update it accordingly. Let us learn from the Pony Express, which didn’t have the luxury of being a government entity.
Maybe a new goal of our Postal Service should be a modernized version of the original charter of providing reliable communications to all Americans. The goal would be to ensure that all Americans have ready access to high-speed Internet service.
Regarding security for mail boxes, perhaps the USPS could facilitate the availability of wireless remote devices each mail box holder could use to open their mail box with a unique code, and the mail carriers could have such devices with a secure rolling master code. To carry this thought one step further, what if the homeowner’s same wireless device could also be used for providing unique secure log-on to his/her PC, providing the ability to do on-line voting?
