CREATING AN EFFECTIVE POSTAL SERVICE IN THE DIGITAL AGE

By: L. Rob Werner

The U.S. postal system was established to provide a fast, effective and relatively inexpensive system of delivery of mail to all parts of the country.  In response to proponents of private competitive mail service and the elimination of public mail, the primary argument has been that we need this system to ensure delivery of the mail to remote areas that might not otherwise have private delivery service.

The U.S. postal system generally worked through the 20th century.  However the advent of the internet and e-mail communications has changed the playing field.  Today people rarely write personal letters. They prefer to communicate via phone, text messaging and e-mail. The U.S. postal service loses billions of dollars every year.  Private delivery companies readily compete with its services, especially in the delivery of packages and important documents.  If the postal system as it now exists is left in place, it will amount to a black hole consuming continually more tax payer dollars for decreasing services. 

We need to determine who the primary users of the postal system are and how best we can service them.  Take a look in the average mailbox.  What we find are advertisements, bills, notices and special occasion cards. 

The big questions are: How can we continue to provide these services while improving efficiency and reducing costs?  How can we modify the way the postal service functions with the least amount of disruption?

There is no compelling need to have the postal service deliver advertisements.  These services can be performed by inclusion in newspaper delivery, handouts and other private delivery services.  However, if the postal service is already delivering mail to an address, then the inclusion of advertising may provide a means to spread the cost.  The way the system currently works, the costs to the postal service are too high.  An advertisement could be generated in New York City and sent to Fillmore, California.  This would generally require processing at the postal center in New York and the one that services Fillmore. It would require pick up of the advertisement close to its source, transportation to the local distribution center, transfer to the airport, and transfer from the airport to the next distribution center and perhaps to the local post office. 

With modern technology we can eliminate many of these expenses.  The advertisement can be e-mailed to a printing service that delivers the advertisement directly to the postal distribution center.  This may add some additional expenses to the mass mailer who is sending ads to several cities as it would generate a need to have several printers, but this is a cost they could and should bear rather than force it on the postal service. 

Today, many people are handling their bills online.  Yet there is still a need to get hard copies of bills delivered to physical addresses.  Often legal notices also require hard copies.  These bills and notices could be generated and then e-mailed to and printed at or near the postal distribution center. 

Greeting cards, invitations and personal letters present a more difficult problem.  Since there is generally no mass production they may not be suitable for local production.  There are solutions.  We could encourage more use of internet greeting card services and e-mail.  If there is an increased demand, the market should respond.  In the future one might send a greeting card or wedding invitation much like one sends flowers from afar through the use of services similar to FTD.    Local printers or delivery services would have an assortment of cards that one can order on line.  These same cards could be generated from or near each distribution center.  If this process does not entirely work, then for this type of service we could limit mailing to certain days.  If necessary we could charge a premium for mail not delivered directly to the processing center.

If these changes were implemented there would be a substantial decrease in the current postal workforce and transportation expenses.  To avoid the sudden shock of this transition, the postal service could develop a program to carry out these reforms over a couple of years.  By utilizing advance announcements and a time table, postal customers could have a smooth transition into the new service.  It would also give the market time to develop and set up procedures and new companies to facilitate the new U.S. postal system.