From Pitney Bowes:
I couldn’t help but think about this as I read Thomas Sowell’s attack on the U.S. Postal Service (USPS) on the website of the New York Post. His arguments are based on only the most superficial interpretations of the market for sending physical information and goods from one place to another, and it’s important that more complete analyses be heard as well.
Sowell perpetuates the myth that, somehow, privatization of postal delivery will lead to “cheaper or better” mail service. He cites the profitability of FedEx and UPS—both great companies—as evidence that the private sector would trump a government service.
Cheaper? As of Jan. 22, the USPS will charge exactly forty-five cents to send a confidential, hack-proof message from anywhere in the U.S. to anywhere in the U.S. It’s a good deal for consumers, and it’s an even better deal for businesses that use the mail to communicate with their customers or reach out to prospects. In fact, it’s about the lowest first-class postage rate of any industrialized country, and helps make the USPS a major economic engine.
Sowell might also ask executives at FedEx and UPS whether they want to take on the USPS’s duties, particularly at 45 cents per piece. The brilliance of their business models is that they have accurately segmented the mailing and shipping market, and identified those customers who are willing to pay more for the speed and transparency they offer. Sowell may not realize that even these iconic companies are increasingly turning to the USPS for last-mile package delivery in less-profitable markets.
Vice President, External Communications