Is the government monopoly on mail a good thing?

It may sound odd to talk about the United States Postal Service (USPS) as a “monopoly.” But that’s exactly what it is.

Article I, Section 8, Clause 7 of the U.S. Constitution affirms the ability of the government to “establish Post Offices.” And various laws give the USPS a “statutory monopoly” on non-urgent First Class Mail and the exclusive right to put mail in private mailboxes.

Translation: It’s illegal to deliver most types of mail, including letters, postcards, catalogs, magazines, and bills, if you’re not the USPS. That’s virtually everything any business would mail to customers or prospects. Yes, you can send something via an “urgent” service, such as FedEx, but the law stipulates that what you send must be urgent. Plus the law forces the delivery service to charge at least $3.00 or offer the service for free and place the thing you’re sending on your porch or somewhere other than in your mailbox.

There might be good arguments for such a powerful monopoly in the early days of the U.S., but what about now? Should the USPS continue to hold a monopoly on all “non-urgent” mail? Or should businesses be allowed to compete for whatever sort of delivery service they want to offer?

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Comments

5 Responses to “Is the government monopoly on mail a good thing?”

  1. Craig Killick on December 20th, 2007 12:39 pm

    I think the problem is that the delivery side of the equation is also an obligation.

    In the UK, with the monopoly on the postal service now eroded, large carriers have come into the frey and cherry-picked the large contracts, leaving the Royal Mail with the rest, and the obligation to deliver.

    The only people this benefits IMO are the companies who have lots of post to send.

    As a customer who needs to post the odd letter, I need to still use Royal Mail, who prices have had to increase, and as a receiver of mail at work and at home, the level of service has also reduced.

    I’m all for competition but I think in this instance, in the UK at least, it doesn’t benefit many people.

  2. Janice C Cartier on December 20th, 2007 2:02 pm

    I like mail. I like nifty stamps. I like getting letters. Real letters. That someone wrote with a fountain pen or a pencil even…I groan at all the invasive junk that creeps in…unless it brings me something that adds value to my life. And I like my mailmen, the one here who will get out of his little open door delivery vehicle and walk a large package or a special piece of mail up to my door, ring the doorbell and say I thought you might want this one right away. At home ( New Orleans) my mail carriers liked my block so much, they parked their vehicles under the oaks for lunch break and ate their picnics there. They kept an eye out on my mail and knew the hiding place within the gate for packages if I had stepped out to sketch.
    So, I am thinking how would my life improve if I had competing mailmen( and women) My fed Ex and UPS people knew me too…if it brings me the same grief picking a phone service does, count me out.
    For outgoing missives and packages, I have Rahim. He wants my business. He is a clever entrepreneur from India who took over the local MailStop. I just drop off or send things there and Rahim picks the best service for the best price in the best time. Everyone is pleased. First class USPS is winning so far.Although we tag all the bases depending on criteria.
    I figure you wouldn’t have brought it up, if there wasn’t a conflict somewhere in your business. I did have handmade invitations to a Former Kings Ball hand delivered by tuxedo wearing silver tray bearing young men in limousines one year as part of a design project…if the post office is giving you grief, I ‘ll see if the guys are available for you.
    Seriously, what’s the beef? ” compete for whatever delivery service they want to offer” Are we talking flying dwarfs with banners? G-men with briefcases? Telegrams? Remember telegrams? Are you sending the sharks and the jets up my sidewalk?
    All best, Jan

  3. Suzanne Obermire on December 20th, 2007 7:23 pm

    I would love to see proposals from other firms to compete with the USPS. As a direct marketer, I hate being forced to deal with their rate increases, that oftentimes don’t seem to make sense, or equate to what’s going on in the mail.

    But, the comment from the UK got me thinking. Anyone who would take over and/or compete with the USPS for mail delivery must also have the obligation to deliver personal mail, too. Logistics might be tough. Perhaps the new competitors would have to simply pay a subsidy to the USPS to help support 1st class…

    Not sure, but I like the idea of opening the door to competition.

  4. Dean Rieck on December 21st, 2007 1:37 am

    Suzanne,

    I’m with you. I’d like to see the door open for competition. Remember, companies like FedEx already deliver packages. So the competition we’re talking about would be letters, bills, direct mail, etc.

    Either a competitor could deliver or not. If they can’t compete with the USPS, then the USPS wins. But if a competitor can do it better, then why shouldn’t they?

    Here’s a paper about Sweden’s mail service that concludes competition “tends to lower costs and stimulate innovation.”
    http://www.cato.org/pubs/journal/cj13n1/cj13n1-5.pdf

    BTW, I have nothing against the USPS. I’m a fan, actually. But I’m also a pragmatist. What’s best is what works. I’d like the opportunity to find out what works.

  5. Chui on December 24th, 2007 8:08 pm

    One way to counter cherrypicking is to implement Universal Service Obligations. This is done in Ausstralia for telecommunications industry. This means the entire industry is responsible for ensuring that regions which are more expensive to be service continue to be serviced at the same price point as in the cities. Effectively, it means all participants have to price their city services higher to subsidize services in the smaller regional towns.



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