Cancel Snail Mail?

This article appeared in the Washington Times, January 18, 2000.
It took the U.S. Postal Service all of one week to ring in the new millennium by announcing that it is raising its prices. If you missed the announcement, stamp prices are likely to rise by another penny this year to 34 cents, to mail what is falsely advertised as “first class” postage. A penny rate rise may not seem all that significant, but consider that the total cost to mailers will be roughly $1 billion.

At a time when we are facing rapid deflation of costs in almost every area of computerization, telecommunications and information technology, where cut-throat competition is leading to big savings for consumers, the great American mail monopoly stands virtually alone as an organization that can get away with gouging customers through continual price increases.

In fact, a strong case could be made that the Postal Service (USPS) is now the most anti-consumer company in America. Yet the trust busters at the Justice Department, who seem intent on driving Microsoft to its knees, won’t lay a finger on it.

Mail delivery is also a unique industry because it is one of the few services in America that by objective measures has gotten consistently worse over time. It used to be as recently as the 1950s that mail was delivered twice a day and right to your door for less than a nickel (see table). As investigative reporter James Bovard points out in his indispensable book Lost Liberties, nowadays, mail is dropped at mail boxes or “cluster boxes” that can be more than a half mile from one’s doorstep, and they charge 33 cents. If mail costs had just risen at the rate of inflation since 1960, a first class stamp would cost about 26 cents.

Have you ever compared the speed and professionalism of a United Parcel Service or Federal Express employee with that of the local mailman — or “letter carrier” as they are now called? It’s like comparing Deion Sanders to Don Rickles.

The source of the problem with the Postal Service is no great mystery. The USPS has been granted a legal monopoly by our government. This monopoly dates back to the founding of our country. Mail delivery is one of the few responsibilities enumerated to the federal government in our Constitution. Hence, there are laws on the books called the Private Express Statutes that say no private entity can deliver a package or envelope for less than $3 or twice the cost of a first class letter.

But whose interest do these laws protect? Certainly not consumers. Imagine that McDonalds had a law passed outlawing any other hamburger joint from selling a burger for less than $3 or twice the cost of a Big Mac. The Federal Trade Commission would be all over this case like white on rice.

The Postal Service says it needs to have monopoly protection to provide “universal service to the nation at one uniform cost.” Yes, but that universal service is lousy for almost everyone, and the uniform cost is uniformly excessive. It used to be said we need a Postal Service because only the blue uniforms would deliver to remote rural towns in Maine and North Dakota. But nowadays Federal Express and UPS will deliver to any address in the country. In fact, the whole 18th century notion that we need to have a national mail system to tie the nation’s communications system together is as defunct as the rotary phone. These days, if you live out on an iceberg in Alaska, so long as you have a computer and a telephone line, you can communicate instantly with a double-click of your keyboard to send messages to almost anyone you wish.

No one knows for sure how much monopoly mail milks from consumers every year, but the best guess is between $5 billion and $10 billion a year — as a result of higher costs and slower service.

The pro-consumer solution is really quite simple. Repeal the private express statutes. Let anyone from Federal Express to the local Boy Scout troop deliver letters for any price they wish. Competition will surely lower prices and speed delivery times. Imagine how fast you might get served at your local Post Office if the clerks knew that you could simply go next door to the Seven-11 if they were too slow and surly. If postal workers knew that their jobs depended on providing fast and friendly service, they might start to really move their tails for you — and me.

Until that happens, the only way to protest the USPS rate increase is to stop using its services. You can now use e-mail to send virtual get well cards, birthday wishes, or valentine kisses. The cards are wonderful — colorful, personalized and they even play a jingle. And to send them doesn’t take three days, but about three seconds.

If the government won’t bust up America’s last great monopoly — then our only hope is that technology will.

Stephen Moore is director of fiscal policy studies at the Cato Institute.