Amazon and Innovation

Should the US Postal Service Be a Monopoly?

by Elaine Schwartz    •    Nov 14, 2013    •    549 Views

The 5-digit zip code is rather amazing. Introduced by the US Postal Service in 1963, it became the key to automation. Whereas a single person could sort, at most, a letter in one second or 3600 an hour, zip codes meant machines could take over. Once we had machines, 30,000 letters could be sorted in one hour.

The USPS used a zip code tune to spread the word:

 

With the gargantuan task of delivering mail to all of us, the USPS has performed admirably. As Joint Postmaster General for the British Crown, Ben Franklin established our first home mail delivery system. Imagine the impact on the economy when he cut in half the delivery time between New York and Philadelphia by having postal wagons travel at night in addition to their normal daytime hours. As for stamps, 1867 marked the beginning of their widespread use (picturing Ben Franklin and George Washington) while new stamp canceling devices have come and gone as have increasingly efficient sorting systems. Even with advent of the fax, telegraph, telephone, email, UPS and FedEx, the volume of mail grew before 2007.

And now, we will have the return of Sunday package delivery.

On Sundays during the 19th century, post offices were a place to hang out . Or, as one historian said, “Men would rush there as soon as the mail arrived, staying on to drink and play cards.” By 1912, though, with a religious lobby opposing Sunday delivery and the telegraph available for the business people who wanted 7 day service, the Congress mandated that “hereafter post offices…shall not be opened on Sundays for the purpose of delivering the mail to the public.”

With an Amazon/USPS Sunday delivery agreement, people are wondering whether we are again seeing some signs of life from a dying organization that is hemorrhaging cash. Most believe though that the US Postal Service monopoly on letter delivery coupled with Congressional control stifles innovation and productivity.

Our bottom line: Since the postal service is not a natural monopoly in which a huge capital investment means a single business unit will be most efficient, perhaps it should no longer be a monopoly. Some even suggest the USPS should be privatized.

Sources and Resources: The Atlantic, on Sunday mail delivery and technological history provided the most interesting articles (and my quotes) about the USPS while Walter Isaacson’s Ben Franklin bio and a Teaching Company lecture had excellent post office history and analysis.

 

 

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