I have often heard people question why the US postal service, USPS, cannot be as efficient as UPS or FedEx. There are voices clamoring for privatization of the postal service.
Benjamin Franklin Our First Postmaster
The U.S. Postal Service was founded in 1775 by Benjamin Franklin a Founding Father of America and the first Postmaster General. Back then, people messaged back and forth with letters that were delivered using boats, wagons, horses, or just people on foot. There was no telephone, telegraph, internet or fax machines. Postal operations were essential to the function of business, government, and everyday life.
For many years, the postal service was not called the postal service. It was a cabinet level department of the United States government, known as the United States Post Office. In 1971 it was set up as a quasi-private governmental entity, which could operate somewhat like a private company with certain restrictions. However, its mission remains unchanged. Provide postal service to ALL Americans.
USPS, FED EX, and UPS: The numbers
Here are some numbers to contemplate. The USPS handles about 320 million pieces of mail every day. By contrast, UPS handles about 25 million and FedEx about 16 million. United States Postal Service handles eight times more mail than UPS and FedEx combined. EVERY DAY.
If you live in “nowheresville” Alaska, you will not see a FedEx or UPS truck. However, you can rely on that mail will be delivered to your location by the United States Postal Service.
UPS and FedEx can cherry pick where they will deliver. As a private company their goal is to make a profit. It makes good business sense to only service higher density regions. They are not a public service. The Post Office is.
The United States Post Office must maintain infrastructure in areas where it cannot make a profit. UPS or FedEx are not bound to deliver anywhere they deem unprofitable.
UPS and FedEx can change their pricing and delivery protocols on a moment’s notice. US Postal Service must pass any changes through the US postal service Board of governors. Those governors are appointed by the president and confirmed by the Senate. There’s quite a process involved in getting a change to postal rates. It’s not instantaneous, as it can be with UPS and FedEx.
Furthermore, the price of a first-class stamp is the same for everyone, regardless of how large or small a customer you are.
Essential Services
There are certain services that are deemed to be so essential to citizen well-being that government has a tradition of financing those services in areas where the private sector cannot or will not. A prime example is the Rural Electrification Cooperative. An initiative from the New Deal that allowed the government to finance the extension of the electrical grid into small rural communities. It resulted in universal access to the electrical grid and helped raise small rural communities out of poverty. We did the same thing with broadband infrastructure in the 90’s.
The Keyword is Service
So, let’s remember what our governmental Postal agency is called. It is the United States Postal SERVICE. It is a crucial public service provided to all citizens by our government. It is a basic element of our shared prosperity. A privatized version with the mandate to be profitable would result in the deterioration of this crucial service to our citizens. Can it become more efficient? Of course. Every organization can always improve its efficiency, but it will never be able to compete with UPS or FedEx.