Friday, October 28, 2011

Snail Mail

In a change of pace from the financial markets I was thinking about the postal service. First, I like my mail carrier and just about everyone in the two local post offices is rather helpful and nice (I said almost all). I even use mailing supplies available there when I ship products.

But in this new age, the budget problems in the postal service may be telling us that it is time to change. Think about the mail you now get delivered each day. How many pieces are items you wanted? And now think about how many items are bills, advertisements and statements?   I'd say that at least 90% of the items that the post office delivers to me is in the latter category.

Who writes letters anymore? Email is dominant. It is fast. It can come with delivery confirmation. It can deliver photos, documents, music, videos and everything else that is not a physical thing - such as a puppy or popcorn maker. 

I do just about all my bills online. I get just about all my statements online. Admittedly, I still get some paper statements delivered as a punitive act towards companies I just do not like. Save a tree? That is not why they want me to switch. They want to save costs. But I digress.

And the rest is junk mail. How much energy and resource is dedicated to direct mail marketing? How much of that goes from the mailbox to the garbage can without even stopping on the counter to rest? At least we can set up spam filters to cut down on rogue email.

For-profit delivery services are everywhere and while they cost more than a first class postage stamp to deliver anything they are not that bad thanks to competition (hint - free market).

There are two drawbacks to eliminating the postal service. The first is the work force, of course. There are a lot of solid workers there, along with the occasional machine gun toter, that would be out of jobs. But wouldn't FedEx and UPS need more workers to pick up the slack left by the post office? Well, some. I also can imagine a deal where the for-profit services actually take over some the physical post office buildings to keep it convenient for me to "step out of my office for a moment" to ship something. Aren't the UPS Store and FedEx/Kinko's just that? I would not mind having a few more around town.

The second drawback would be service to rural and other areas that might be overlooked by for-profit services. The post office delivers everywhere and that is good - but at what cost? Perhaps there is some deal to be made with the government picking up a portion of the tab to these places but that is a slippery slope. Perhaps the free market will figure it out - perhaps offering less frequent service to these places but service nonetheless.

I am not a logistics expert. Let the real experts have a go at it.

The pony express gave way to a better system. And I am afraid it is time for the government to get out of the delivery business.


wt said...

I shipped a package this week that Fedex would charge $28 for and the post office shipped it for $12.

patrick neid said...

I sure would miss Priority Mail.

Michael Kahn said...

wt - My thesis is that FedEx and UPS and the others would have to compete for a lower cost option.