The Market for Mail

Today I read a piece about how the US Postal Service is looking to cut costs as they stare at a potential cumulative $250 Billion shortfall in 2020.

From Reuters:

The U.S. Postal Service, faced with less mail and bigger shortfalls, plans to cut Saturday delivery and overtime, raise prices and trim its workforce by about 30,000, its chief financial officer, Joseph Corbett, said on Tuesday.

Because of e-mail and private delivery companies, traditional mail volume is expected to be down from last year by about 10 billion pieces in 2010 with first class mail expected to drop 37 percent by 2020, leaving the service with a cumulative shortfall that could hit $238 billion by 2020.

Faced with that shortfall, Corbett said the service was planning a moderate increase in stamp prices and pressing for a law to be changed that would allow it to drop Saturday delivery.

In today’s mailbox, out of 10 -12 pieces I received, only one was actually somewhat important.  I would figure most Americans have a similar experience.  While this article says that the problem is due to mail volume is dropping, I think the problem is completely the opposite.  There is WAY too much mail.

The US Postal Service is setting a price for mail at which the supply dramatically outweighs the demand.  This has led to the proliferation of Sharper Image catalogs and Super-Saver coupon packs.  It allows many companies to lay off some of their spamming marketing costs onto the post office.   The original intention of the post office wasn’t to give horny old men cheap thrills twice a month when the Victoria’s Secret catalog arrived, but to deliver important, relevant messages.  Even if I’m wrong, the internet is killing that intention too!

Since the postal service could essentially become a government subsidized spam factory, is this even a business we want to be in?   There must be a better and cheaper way to work alongside the private market to ensure that vitally important messages are promptly delivered to the citizens at a reasonable cost.

Advertisements

  1. Seems pretty easy to solve: cutting Saturday delivery, switching all employees from a pension plan to a 401k, and double the prices.

  2. Don’t forget the Union, that’s probably not helping, much, either.

  1. 1 Hot Links: The Toughest Man Who Ever Lived The Reformed Broker

    […] Zerobeta on the US Mail Fail.  (Zerobeta) […]

  2. 2 Wednesday links: big bet blues Abnormal Returns

    […] How the US Postal Service is in the spam business.  (Zero Beta) […]




Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s



%d bloggers like this: