Should the Postal Service be a competitive business?

Part of the USPS OIG series on Five Elements of a Postal Solution

The record on competitive postal services is mixed. Private postal operators in Latin America are thriving, while in the U.K. they are lagging. Theoretically, competition increases efficiency. However, the U.S. postal service can now deliver cheaply because it visits every house and every office in the U.S.. six days a week using regularly scheduled routes. Splitting the volume among competing carriers would dramatically increase the cost of delivery per piece, perhaps forcing operators to go to on-demand delivery, like parcel and express companies.

The Postal service has successfully opened its infrastructure to mailers through work-sharing. To continue to deliver value, extend the useful life of the mail, and bring volume back to the USPS network, the Postal Service should further open its infrastructure (distribution network, data, real estate) to innovative, entrepreneurial private activities that will generate mail. As we show in a recent Mail and Express Review article, these activities could include parcel stations operated by competitive private operators, targeted, customized multi-media campaigns that capitalize on the mail moment, government services, and other innovative uses of the mail yet to be discovered. The key for the Postal Service is to open its infrastructure and make it attractive for the private sector to innovate and invest in the mail.