The US Postal Service is Dying. Let it.
by Thomas L. Knapp…….
Like most monopolies, the US Postal Service isn’t interested in changing its business model. An enterprise hemorrhaging cash in a free market would cut prices, improve service, look for new revenue streams, or simply close its doors. The USPS solution, as usual, is to raise prices and hope for the best.
Alternative proposal: Let’s put it out of its misery.
The Service posted losses of $562 million in the first quarter of 2017, the Associated Press reports. This year will likely bring the Service’s sixth straight annual operating loss. While its package delivery revenues have grown, the areas in which it enjoys a monopoly — “first class” (letter) mail and “marketing” (junk mail) — are in decline thanks to the ascendance of email and other Internet technologies.
That decline is terminal. The age of hand-delivered paper mail on the scale required to sustain the Postal Service model is coming to an end, and the market is already well-situated (via the likes of Federal Express and United Parcel Service) to handle ever diminishing future levels of emergency and vanity traffic of that kind.
In truth, we’ve known for nearly 175 years that the Service’s government-granted monopoly is all that keeps it afloat. Its prices don’t reflect the market value of its services. In 1844, anarchist Lysander Spooner founded the American Letter Mail Company and turned a profit selling stamps for 6.25 cents each or 20 for a dollar versus the Post Office’s price of 12 cents, delivering mail up and down the eastern seaboard until the federal government shut it down.
In the past, one excuse for a government monopoly on mail was to protect “universal service.” Spooner could make money serving Baltimore, Philadelphia and New York, but the government’s postal monopoly used those “easy” routes to subsidize letter delivery to, for example, rural Kentucky and distant San Francisco, where private competitors would have had to charge prohibitively high rates.
Today, however, nearly all US households have telephones (cell or land line). According to the Pew Research Center, 84% of American adults use the Internet, and most of the rest COULD use it. Even with no home connection, they could visit the library or any of numerous free wi-fi locations, just as citizens of rural communities once visited the Post Office to pick up mail in the absence of home delivery.
If the Postal Service shut its doors today, taxpayers would still be on the hook for generous retirement and retiree health care commitments to its current and former employees. That’s no reason to keep throwing good money after bad forever.
Neither is our natural nostalgia for the big blue corner mailboxes and the friendly neighborhood mail carrier.
Let’s say goodbye to what’s clearly become a relic of a bygone age.
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Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
and i suppose that the 2006 postal accountability and enhancement act had nothing to do with the “market” situation. you know, that little edict by congress where the post office had to pre-fund the health benefits of future retirees 50 years in advance. or forbidding rate increases beyond the consumer price index. or forbidding them from eliminating saturday delivery at a cost saving of 2 billion per year. or forbidding them to close thousands of rural offices, or saving 4.5 billion per year by eliminating doorstep service and going curbside. no, no, nothing as trivial as all that.
there are no market forces Mr. Knapp; everything is manipulated and controlled, as is this drive to eliminate yet another public service and, and then let the “private sector” take over and do better. when has that ever worked out?
I completely agree with keysbum on all of his particulars. Knapp gives Libertarians a bad rap in this shallow column.
And…I completely agree with your assessment, Mr.Boettger. A shallow column indeed.
Sorry, Mr. Knapp.
Dickford
Nothing to be sorry about. If I’m wrong on this one — I don’t think I am, but if — it won’t be the first time. At 150 columns a year, I suspect I’m wrong at least once or twice annually.
The only thing I’d contest is the notion that the column is “shallow” as such. I write to a specific length/format and for a particular market (500 words or less op-eds for publication in newspapers — and I’m proud, btw, to appear in Key West’s finest!) and I wade into the topic exactly as deeply as that length/format/market permits.
Thank you for your response, Mr. Knapp.
Let’s cut to the chase, eh? My characterization of your piece as being “shallow” has nothing to do with the obvious constraints imposed by your market. Rather, it has to do with the lack of depth in what you propose.
To begin with, the Postal Service is as old as our Constitution…and nowhere is “profitability” (or lack of it) mentioned. The USPS has always been a social institution, not a business. IOW, it serves ALL the population…without regard to economic viability. That was always its design: A vital conduit for information to freely flow. It is as vital as health care, Social Security, public broadcasting or most of the rest of our social programs. It’s a package deal…
You claim that 99% of our population is served nowadays via electronic means. Hogwash! It might interest you to know that more than 40% of our geographic area has NO reliable electronic services whatsoever. Assuming that your 99% figure is correct, for a moment…does that suggest that the remaining 1% of the population just doesn’t count?
You used your own example of living in a rural area…that serves actually as a counterpoint to your proposition: USPS was used to deliver to you…which, in turn, served to sustain the profitability
of the primary for-profit carrier. What can I say?
Finally…as “keysbum” pointed out, what other organization is required to fund the retirement of its retirees FIFTY YEARS from now. Go ahead: Name ONE! Take your time…
Dickford
Mr. Cohn
Actually, the US Postal Service, in everything but name, is older than the Constitution by more than a century (the North American Postal Service was founded in 1691, the US Post Office Department in 1792).
The Constitution authorizes Congress to establish post roads and post offices. It does not confer a monopoly to the government on either of those activities.
I’d be interested in where this 40% of the US that “has NO reliable electronic services whatsoever” might be.
In any case, yes, I get it: You disagree with my opinion that the Post Office should be allowed to die, and you have reasons for disagreeing. Good on you — I hope you’ll distill those disagreements into, say, 450 words and submit them as an op-ed to The Blue Paper and other outlets!
As well, the federal government is losing millions by giving huge subsidies to postal employees for their health insurange. The monthly cost to a regular federal employee for Blue Cross/Blue Shield Standard coverage is $550.84; postal employees pay only $226.16. And it took me two years and the help of Senator Nelson to get my mail delivered dry where I now live!
Will admit we seldom send any mail. Fact is most all of our bills are paid online. So yes likely they are facing rough times. They do now deliver some amazon packages to make up for the loss. Even junk mail is getting lower because many like me just toss it in the garbage without even reading it. But yes we do still need a postal system.
I call Keys Aqueduct and Keys electric and pay over the phone. No more stamps needed for those two bills.
Remember the Photo Mats of the 60’s- 70’s ?? Technologies will phase out obsolete businesses private and government.Stop trying to beat a dead horse.
I don’t get milk delivered anymore but still have it in the fridge.
Time to end saturday delivery and eventually letters. Let private mailrooms pick up the slack. The postal unions went nuts when private stores opened US mail centers. I think it was Staples of Office Max. They demonstrated that they could do a better job than the US unionized postal worker.
Time to cut our losses , pay the legacy cost and let the free market place reigh !!
I don’t think office supply stores had anything to do with it. It was Mailboxes, etc, and various quick print chains. The national franchise for Mailboxes, etc. was purchased by UPS and now are called UPS Stores. The advantage of a private mailbox is that you get a street address and they accept deliveries from UPS, FedEx, DHL as well as the post office. Anything needing a signature is signed for by the store, which is a big convenience.
The system is needed for some needs such as legal papers. Problem is it runs at a loss that tax payers pay for. In short the government does not know how to run anything when money is involved. Not sure what the fix is short of raising the cost of a stamp to $5 and then only legal papers will be mailed. Our mail box is always full of junk and maybe 1 important item a week. Sadly I think that mail box must stay in place.
Can’t say that I have dealt with a lot of legal papers in my life, but aside from the ones delivered by process servers, it seems to me that there’s no reason e.g. FedEx couldn’t duplicate certified/registered mail services. They’re already set up to do things like require signature on delivery and so forth.
Market forces have nothing to do with it, as other writers have pointed out.
Private companies have already bled off a lot of the package delivery business from the USPS. The USPS is only protected on first class mail.
Although many people do not send or get much mail, the USPS is still critical for business. USPS delivers more internet orders than anyone. My business ships small stuff and the USPS is the best way of doing it and I ship products every week day that I sell online.
Actually, the opposite is true: USPS is carrying more packages than ever and doing so profitably. It’s “first class” and “marketing” mail that they’re losing money on.
BUT: The “first class” and “marketing” mail is the EXCUSE for their package services, which serve as “last mile” subsidies for e.g. UPS and FedEx.
I live in a rural area. About half the time I order something that is shipped by UPS or FedEx, it actually ends up being handed off to USPS for final delivery, so that UPS doesn’t have to spend money on big brown trucks running around in the sticks.
The reason that UPS can hand a package to USPS is that USPS is already coming past my house every day, and the reason USPS is already coming past my house every day is to deliver the stuff they’re LOSING money on.
At this point, USPS is $2 billion per year in taxpayer funded corporate welfare for the package delivery industry.
99% of us might do just fine without the USPS but that 1 % is still very important to some. I might point out that not everyone has computers or a means to get to one. So yes still needed. Perhaps focus on why running at a loss. Some of us do not drive and count on the mail as pickup and delivery.
Actually, Mr. Knapp…450 words to outline my disagreement with your stance would be overkill. 😉
I put the Postal Service into the same category as government itself and its many, many services: Public education, libraries, public health, general welfare, infrastructure, national defense, police, fire/rescue etc., etc. I won’t bore you with the list…you already know what I’m talking about. So…out of all these admittedly costly endeavors, why should the Postal Service be singled out due to its lack of “profitability”…a lack caused primarily by politics?
I find no fault whatsoever in strongly encouraging all of these functions to operate in a financially prudent manner: That is expected…even demanded. That said, public services must be accessible (and affordable) to all citizens. Anything less is shame on us.
As it now stands, there is not one single “private” company that is remotely capable of providing ALL of the services of the Postal Service: There isn’t a private company that even wants to…
Dickford
OK, like I said: Disagreement. We’re coming at things from opposite directions. Among other things, looking over the “many, many services” you list, I don’t see any that I wouldn’t, given the opportunity, ban government from being involved in.
And no, 450 words to actually argue, rather than merely state, your stance would not be overkill. You’ve already used up nearly 400 merely explaining that stance without really elaborating any of your arguments for it. I face the same problem in every column.
Aha! So our “disagreement” is focused on our political leanings more than anything else.
Is it fair to refer to your political view as “libertarian”? If so, I completely understand. Obviously, my view of politics is somewhat different. And, I strongly suspect that there never will be a meeting of the minds on the politics.
FWIW, I read your column(s) every week here. They certainly provide food for thought…which I do appreciate. Keep up the good work.
Dickford
Dickford,
Yes, “libertarian” is fair — sometimes I preface the “libertarian” with “left.” Glad you find the columns worth reading even when you don’t agree with their content!
Thomas,
If I restricted myself to reading stuff that I agree with my life would be dull, indeed. Besides that, I would learn nothing. Might as well go fishing. 😉
Dickford
You say “go fishing” like it’s a bad thing 😉
Thomas,
Yes…fishing is a singularly non-productive exercise in my opinion. I don’t really care to eat fish, let alone catch them. Besides, the fish seem to sense my attitude toward them, swimming mockingly just out of my reach and laughing their heads off at my tentative attempts to land ’em. Hell, even the pelicans move on down the rail to more productive fishermen. They ain’t stupid.
Dickford
Take a good look at what OBAMA cost us with his 8 years of stupid vacations and costly vacations of his stupid b— ugly wife and the loss of usps is nothing.
As I’ve written elsewhere, the more time a president spends on vacation, the better. Hopefully he does less damage that way.
I supported TRUMP 100% and he will get this country fixed even if on vacation.
You might be overlooking some laws that require a letter by usps required by law in the business world. All of them would need changed before closing the usps. You are a bright person but are clearly lacking the skills required on this issue.
Changing laws/regulations requiring USPS-sent letters would be a matter of one paragraph in legislation closing the USPS.
You are right that I lack the skill to condense what would probably be a thousand-page bill into 450 words. Why, when I wrote a column advocating an end to the Afghanistan war, I completely forgot to include a schedule of retirement and health benefits, as well as medal and ribbon allocations, for all who served. How unskilled!
Shame on you, Mr. Knapp! Why doncha bone up on your skills?
😉
Dickford
I had hoped that after nearly 40 years in journalism, the skills would be pretty much habit. Maybe I’m slipping in my old age 🙂
Yessir! Old age it is! Or…at least it’s a legitimate excuse. Don’t tell anyone I said that, eh? 😉
Dickford
You simply are not understanding just how many legal issues require a letter by the usps.Each and everyone of them would require a change and then the issue comes up as to now that it is private service it can not simply pick one.Not knocking your idea just saying not practicle. The day might come but since when did the government care about profit ?
“You simply are not understanding just how many legal issues require a letter by the usps.”
Maybe not. But what I AM understanding is that it would take a couple of sentences in a bill eliminating the USPS to take care of that problem. Something like this: “In all extant statutes requiring delivery by the US Postal Service, the words ‘US Postal Service’ are hereby amended and replaced with the words ‘delivery firm.’ All contracts specifying service by the US Postal Service shall henceforth be deemed in adjudication to include delivery firms under that specification.”
If lawmakers wanted to get complicated about it, I suppose they could create some kind of system under which firms get certified by government as a precondition of carrying letters to such legal effect.
Eliminating the US Postal Service would come with some complex issues. This isn’t one of them. Or at least it doesn’t have to be.
Actually, I think that Jim is slightly mistook about “statutes” specifically *requiring* the use of the Post Office to transmit legal documents. It certainly is mentioned as an acceptable (to the courts) device with which to achieve legal service. But, it does not exclude any other service providers, including private messenger, process servers…even personal delivery.
The objective, of course, is the guarantee to the court that service was completed in good order. That’s why they use affidavits.
Presented FWIW…
Dickford
I’m not sure he was referring exclusively to the courts themselves so much as to documents which might end up in evidence, or claims that might end up in contention.
I seem to recall that in at least some states, notices of e.g. overdue mortgages or other loans and pending foreclosure/collection actions are required to be delivered by certified or registered mail with signature as proof of receipt.
The logic seems to be that the USPS is a relatively objective/unimpeachable way of establishing that notice was given.
I don’t disagree with that logic, just with Jim’s claim that it would be difficult to transition that kind of thing to a private alternative. UPS/FedEx already require signature on some deliveries and are set up to gather/preserve it electronically. For more convincing proof of delivery, perhaps they could get their drivers set up as notaries public to legally witness the receipt signatures or whatever.
What it would create is a very costly problem to not only my business as a landlord but a huge problem to some people that still want and need a printed bill from insurance , garbage, water , electric, lawn care and hundreds of other needed bills. Yes most of mine are e mail and I can hit PRINT. You simply are thinking everyone has a computer and printer and fact is some do not. Some can’t afford internet or even a car. Yes , am sure the law could change this but it will be very costly for many. As you likely do know many postal workers have a huge pension check if hired years ago and we simply can’t just say SORRY WE ARE CLOSED. The USPS will be running for many years yet. Unlike the private world they can run at a loss forever.
We live in the computer world and mostly that is working fine. For me it is great because when I am in key West and it is often I can still pay bills and if needed can mail notices to tenants if I need to evict them. Without the USPS my job becomes hell if I need to mail something. Yes are other ways and they are time consuming and far more costly than a stamp. Why worry about this loss when we have so many other wasted offices ? Could see the price of a stamp going up but that is why so many stopped using the USPS. We get far less garbage mail in recent months. When I get garbage mail that has a prepaid postage I stuff it with junk and mail it back. They will stop sending when it costs them money. If you have a solution on how to turn the mail into profitable please let us know.
Think this out, registration for a tag in FL is simple. They mail me notice and I send them a check and I get the sticker in the mail. And once every 10 years they mail my new Monroe county plate. Without mail it would get costly and the line to at DMV office gets long and waste gas. That is just 1 of many.
Your idea is great but just not practical.
“What it would create is a very costly problem to not only my business as a landlord but a huge problem to some people that still want and need a printed bill from insurance , garbage, water , electric, lawn care and hundreds of other needed bills.”
Sending that stuff via some company other than USPS is not a “very costly problem,” any more than going to Kmart instead of Walmart, or Burger King instead of McDonald’s is.
Guess we can not agree on this issue and that is fine. I do read many of your articles and they are usually great.
As to easier , all I need do now is stick it in my mail box. That is less than 1 minute and job finished. Who else will pick it up at my office and send it for 44 cents ?
Am sure the DMV office would need to raise its price.
I mail very little so even if a stamp cost $5 would prefer that than calling a place to pick it up or me drop it off. At my age just simply do not need added tasks. I am the type that does most of my shopping on Amazon.
Just ordered a new bike rack to fit our new 2016 mustang. On last months trip did not have bike so could not go to Naja’s house. Wanted to meet her and drop some cash off. Will be back in 3 weeks and is part of my bucket list. Love this paper and need it to keep going.
So let’s simply agree that we can’t agree on this one.
Jim,
I’m always happy to agree to disagree — and thanks for taking the time to argue your points with me!
I only recently got a bike rack going. Makes things a lot easier. Now if time is a factor, I can ride into Gainesville to do stuff and then meet my wife when she gets off work and ride home with her instead of having to spend an extra hour or more on the bike to get back home.
I supported TRUMP 100% and he will get this country fixed even if on vacation.
Did check with my lawyer and actually my lease agreements do give me options of how to send letters but they would be more costly and time consuming. Not sure if that applies to all legal issues or not.
Sorry to hear you got suckered and still haven’t come to grips with falling for it. He’s a standard issue rich, whiny, entitled northeastern progressive welfare queen. But at least he’s entertaining.
Did you want the other choice ? LOL
In my book he knows how to make money and I follow winners.
There were six choices on my ballot, IIRC, not including write-ins. If I’d had to choose between Clinton and Trump, I wouldn’t have bothered voting.
You must be in better shape than me. My legs give out at about 5 miles. When in KW I simply prefer to park the car and go by bike as it is faster to go on bike and no parking issues and with the number of drunk drivers feel safer on the bike. Key West considers drinking a sport.
I am hoping to visit Key West soon — and it sounds like I should bring my bike!