Everyone loves getting mail. Birthday cards from your grandparents, packages from favorite online retailers, life updates from dear friends, and birthday gifts from your family. Email, mobile phones, and social media have altered the way we communicate, but they are still no substitute for a handwritten thank you note sent through the mail. Despite the opinions of a few people in Congress and the White House, the Postal Service is still an extremely valuable service and an integral part of American daily life.
Our latest report evaluates the valuable role of the United States Postal Service (USPS) to the U.S. economy, consumers, and the mail services industry. The USPS, established by the U.S. Constitution, has served the American public and its businesses for more than 200 years. The USPS is the foundation of the U.S. mailing industry and many other industries that rely on the existing USPS infrastructure to deliver their products to final destinations.
In the last decade, the mailing services industry has entered a new era. The applications of the Internet through e-commerce businesses produce both positive and negative impacts on the mail services industry. While networked solutions have reduced the need to mail bill payments, checks, and tax payments, online shopping and auctions create an exponential demand for cheap and fast delivery. In fact, e-commerce businesses are working with the USPS, UPS, and FedEx to deliver mail and packages at lower costs and even on Sundays.
The USPS is the foundation of the U.S. mail services industry and many other industries that rely on the infrastructure to deliver their products to final destinations. In fact, the U.S. mail services industry has become highly interdependent. Both FedEx and UPS rely heavily on the USPS infrastructure for final delivery of small packages in urban and rural areas. The USPS infrastructure has been created, maintained, and expanded over the past decades to a level that no other business entity can provide. The USPS raised the cost of mailing and is proposing to cut back services. While the industry and consumers need solutions for cheaper and faster deliveries, raising prices and cutting services are counter-productive and are against the market demand.
The USPS relies on its economies of scale and scope to create different mail segments. The current proposal of eliminating Saturday delivery would be counter-productive and ineffective. Since these mail segments share the infrastructure such as vehicles and postal carriers, the cost savings would be insignificant. The volume of mail and packages would still need to be delivered on the following days. As a result, the associated costs would still be spent and the USPS may need to hire and train additional part-time workers to handle the bottlenecks and delays in the following days. The adverse effects would be more significant when the USPS fails to satisfy their customers’ expectations and the demand for services.