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March 29, 2010

Instead Of Trying To Save The Post Office, Let’s Try Freedom Instead

by Doug Mataconis

It’s been rumored for more than a year now, but the U.S. Postal Service is taking the first steps toward eliminating Saturday mail delivery:

NEW YORK (CNNMoney.com) — Saturday mail could be one step closer to cancellation when the United States Postal Service submits an official proposal to a government regulatory board on Tuesday to eliminate 6-day delivery.

A new 5-day delivery schedule could save the cash-strapped Post Office $3 billion annually, the agency said. Earlier this month, USPS said it plans to incur about $238 billion in losses in the next 10 years if it doesn’t revamp its outdated business model.

“Every day, every month, every year this gets delayed, we end up further in the hole,” said USPS Deputy Postmaster Patrick Donahoe at a Monday briefing in New York.

Donahoe said a service cut would result in the loss of about 40,000 full-time jobs. About 600,000 workers currently work for the Post Office.

The Post Office hopes to drop Saturday mail in its next fiscal year, which starts Oct. 1. But first, it has to jump through a series of regulatory hoops that could take much longer.

Although it’s an independent government agency and does not receive taxpayer dollars, USPS is overseen by the Postal Regulatory Commission, a separate government agency with five commissioners appointed by the president.

Ruth Goldway, chairwoman of the commission, said that once the board receives the proposal, it will open the issue to public comments and hold hearings throughout the country.

This, of course, is part of the USPS’s problem. If it were a real business, with competitors, it wouldn’t need to seek government permission to engage in cost cutting moves like this.

The Post Office has already set up a website explaining why the move to five day delivery is necessary, and a new poll shows that most Americans support eliminating Saturday delivery:

A majority of Americans support ending Saturday mail deliveries to help the U.S. Postal Service solve its financial problems, but most oppose shuttering local branches, according to a new Washington Post poll.

The public support for moving to five-day deliveries may bolster a new proposal to end six-day deliveries to help the mail agency trim hundreds of billions of dollars in losses by 2020.

Cutting Saturday mail deliveries would save $3.3 billion in its first year and about $5.1 billion annually by 2020, Postmaster General John E. Potter said Monday. But the changes would also mean cutting the equivalent of 40,000 full- and part-time jobs through layoffs and attrition, Potter said as he prepared to formally submit his proposals to postal regulators on Tuesday.

Under the plan letter carriers would stop delivering mail to American homes and businesses and would not pick up mail from blue collection boxes on Saturdays. Post offices would stay open on Saturdays and mail would be delivered to post office boxes. Mail accepted at post offices on Saturday would be processed on Monday. Express mail and remittance mail services also would continue seven days a week.

Potter’s proposal has the support of 71 percent of Americans, with most Democrats, Republicans and independents in favor of the idea, according to the poll.

It sounds like a good idea, but over at Cato@Liberty, Ted DeHaven has an even better one:

Here’s a better idea: give Americans the freedom to choose the mail services they want by repealing the USPS monopoly. That way consumers and businesses could choose to provide and use mail services zero days a week or seven days a week.

Online movie rental services like Netflix offer a small example. A lot of folks time their Netflix rentals so that they have movies for Saturday night. Eliminating Saturday delivery will necessarily degrade the quality of online movie rental services that people are paying for. With competition, Netflix could offer Saturday (or even Sunday) delivery through a private alternative. Perhaps there would be a surcharge, but at least consumers would be allowed to make that choice.

(…)

I find it more impressive that I can go into a grocery store almost anywhere in the country and be met with an incalculable number of choices. Take Coke products for instance. I recently made a list of the various Coke products available to me at a local grocery store. The following is just a sample: regular Coke, Diet Coke, Caffeine-Free Coke, Diet Caffeine-free Coke, Coke Zero, Coke with Splenda, Coke with Lime, Coke with Lemon, and Diet Coke Plus. Don’t like Coke? There’s a similar array of Pepsi products. Don’t like either? The grocery stores also offer pricier micro-brands with all sorts of unique flavors.

These choices reflect the awesome power of the market, which provides nearly all the goods and services people want without any direction from officials in Washington. It would interesting to see what sorts of innovations and products private mail deliverers would come up with if the government’s mail monopoly didn’t exist. Instead, Americans are stuck with a government operation whose floundering business model will require it to raise prices while simultaneously reducing its services. So much for freedom of choice.

Eliminating Saturday delivery is likely to help the USPS achieve fiscal solvency, but it will only be temporary. The forces of technology that are making much of the mail obsolete will continue to work in ways that we can’t begin to anticipate and, some day not to long from now, we’ll be reading they want to cut back to a four day a week schedule to “save money.”

Instead of going through all that, let’s do what we should have done a long time ago — privatize the mail.

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7 Comments

  1. [...] Instead Of Trying To Save The Post Office, Let’s Try Freedom Instead. [...]

    Pingback by The News Factor, an informative online Conservative News Magazine » U.S. Postal Service may eliminate Sat. delivery…do I HAVE to bring up healthcare? — March 29, 2010 @ 6:01 pm
  2. Agreed. With the infrastructure that firms like UPS and FedEx already have in place, they could ramp up into this business quickly and easily.

    Comment by tfr — March 30, 2010 @ 6:06 am
  3. The post office is Constitutionally mandated for a reason. The mail is a public works project, not revenue stream.

    If we privatize the mail the most profitable routes will get snapped up and the more expensive rural routes will either skyrocket in price or get dropped entirely.

    Comment by Bill — March 30, 2010 @ 8:13 am
  4. Yep..my first thought was “What happens when 5 days per week is too expensive? Four?”

    Ok, what if it’s just simply too expensive to deliver mail but once per month?

    The only reason they get away with this is because nobody else is even allowed to touch your mailbox.

    Comment by Chuck — March 30, 2010 @ 8:18 am
  5. Worth noting, Chuck– this is the age of e-mail and cell phones. A big part of the reason the USPS is failing is because the people already decided they don’t want to use that mail service, because new technology has rendered the delivery of letters obsolete (FedEx and UPS can do most everything else).
    We’ll be out one government-controlled company in the near future, I guarantee it.

    Comment by HS — March 31, 2010 @ 1:30 am
  6. > If we privatize the mail the most profitable routes will get snapped up and the more expensive rural routes will either skyrocket in price or get dropped entirely.

    Extremely unlikely. Name a place in the US where UPS and FedEx do not deliver. If there is such a place, a nearby place where they do is probably available.

    Comment by tfr — March 31, 2010 @ 6:16 am
  7. I have 32 years at the post office. I have been a clerk,carrier,window clerk and replacement supervisor. Half of the mail Ideliver on saturday is still in the mailbox on monday when I deliver. Having saturdays off seems like a no brainer to me. Express mail and possibly priority mail would still be delivered on saturdays and sundays, and office would be open to receive mail. In my experience though the post office is so top heavy with management just eliminating all of these layers would be a step in the right direction. in the past when management has been downsized it merely renamed all of the positions and kept all of the managers. kinda makes your head wanna spin around. The union will fight to keep every worker even to the detrement of the company, all they care abuot is their numbers. It would also help if there was a way to address the slackers who think just showing up makes them deserving of a paycheck I love my job, its a hard on your body,but would like to have this job until I can retire.

    Comment by ka br — March 31, 2010 @ 5:10 pm

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