Postal: What If the USPS Disappears?
Once, there was a Constitution-ordained, universal delivery service of hard-copy, print communications called the United States Postal Service. It was affordable, reliable and the most efficient of its kind in the world. Direct mail was its bread and butter, and many brands that sought to find and keep customers in a very targeted manner used the service avidly.
Then a century marked a transition. Change was revolutionary: A new form of communication—soft copy—emerged in a few short years to dominate marketers’ mindsets. It was instantaneous, almost universal and largely perceived to be secure, private and nearly free. Suddenly, the communication engine of hard copy sputtered, financial losses mounted at the Postal Service and an infrastructure for hard-copy delivery was bloated. Commercial and nonprofit organizations that largely paid USPS’s bills were questioning the cost of doing so any longer.
Welcome to the world “after” the Postal Service. Or is it?
Last year, the United Kingdom sold Royal Mail. Many other rich-world posts are already private. Could the USPS—the biggest of them all—really be next for “privatization”?
The ‘P Word’
Mailers, for one, appear mixed on the topic.
“When I look at privatization, I look at Canada Post—which is closer to the U.S. geographically and demographically than any of the European posts,” says Charles Howard, VP of postal affairs at Harte Hanks, an integrated marketing services provider which handles several billion pieces of targeted advertising mail each year. “And that’s when I realize I still have problems with privatization. In March of this year, Canada Post will raise rates as high as 35 percent in some categories.”
“In reality, it would be very difficult for any business to replicate the USPS’s infrastructure for delivery to every doorstep in America,” says Joel Quadracci, president and CEO of Quad/Graphics, a leading provider of print and multichannel media solutions. “Yet, the USPS continues to behave like a monopoly. Case in point: the exigent rate increase, which will negatively impact volumes, resulting in a situation where further price increases will be necessary to cover costs. Ultimately, this will drive even more volume out of the mailstream.”