conventional wisdom holds that postal workers will be the last to
welcome privatization of the U.S. Postal Service, that they will
fight vigorously to preserve that government monopoly and with it,
they believe, their jobs. But need this be the case? Or should
postal workers see privatization as an opportunity?
It is first
necessary to take stock of the USPSís current situation. While the
Postal Service retains a monopoly on the delivery of first- and
third-class mail and the use of mailboxes, it does face stiff
competition on many fronts. Urgent communications can be sent via
a local messenger on a bike or a Federal Express jet. Faxes,
e-mails, and the Internet have reduced the need to put a stamp on
an envelope to transfer documents from here to there.
Accounting Office study has confirmed the fears of many postal
officials. Over the next decade annual USPS revenues, currently at
nearly $65 billion, will decline by some $15 billion as more
people pay more bills electronically. That will mean less "The
check is in the mail" excuses as well as less income for the USPS.
Service wants to offer new business and ecommerce services to
obtain desperately needed revenue. It wants to offer email and
online security services and to coordinate business orders,
shipping, billing and inventory. It has an arrangement with Mail
Boxes, Etc. to offer products at that company's outlets. And in a
move that would have been unthinkable even a few years ago, it has
entered an alliance with tradition rival Federal Express. FedEx
now will be carrying express mail. It is understandable why USPS
wants this arrangement. Private carriers now handle some 90
percent of overnight deliveries. In return FedEx will be allowed
to put its drop boxes in post offices.
These are the
sorts of plans one would expect from any good entrepreneur.
However, the USPS's expansion into new markets and its
public-private partnerships open it to changes of unfair
advantages. After all, the USPS pays no taxes, it can borrow from
the Treasury, and if its new business ventures fail, it could make
up losses with higher stamp prices. In addition to bring exempt
from most government regulations under which private businesses
must operate, it also is exempt from many of the constraints to
which other government agencies are subject, even though it is
government entity. Perhaps worst of all, the Postal Service has
regulatory authority that it can and does use against competitors.
private companies offering innovative ecommerce services seem
inevitable. The Postal Service will be between a rock and a hard
place. So whatís the solution?
Germany we see the wave of the future. Deutsche Post, the largest
mail carrier in Europe, has been reorganized as a joint-stock
company under private management. In November 2000, it made an
initial public offering of stock and in 2003, its monopoly will be
happen to American postal workers if such an approach is tried
here? Deutsche Post did reduce its labor force over a decade
without forced lay-offs. But more interesting is one of Deutsche
Post's motivations. That company is offering a wider variety of
communications, information and delivery services, and is becoming
a continental and global service provider.
U.S. Postal Service, even subject to the same tax and regulatory
regime of the private sector, would certainly be able to integrate
much more efficiently into the new economy. In addition to
ecommerce, who knows what other services it might offer? Maybe
during the day USPS couriers on bikes will offer one-hour
delivery. Perhaps during the evening those postal trucks that
usually are idle could be used to deliver merchandise from local
stores to customers' homes.
A lesson might
be learned from the information revolution. In 1996 ATT announced
it might need to lay off 40,000 workers (in the end it didn't).
But in the decade prior to the announcement the MCI workforce had
grown from 12,000 to 48,000, jobs at Sprint rose from 27,000 to
52,000, and the number of cable operators and programmers in the
economy grew from 24,000 to 112,000. In other words, in the
telecommunications industry as a whole, far more net jobs were
created than ATT planned to eliminate.
and ecommerce is generating more postal volume, not less. It's
just a different mix: more Amazon.com and ebay packages and fewer
electric bills. A private U.S. Postal Service could act as an
entrepreneur facilitating economic growth rather than as a
government monopoly seeking to cripple competitors and acting as a
ball and chain on the leg of the economy.