EDITORIAL: The mailman vs. FedEx

Government monopolies shouldn’t take on private enterprise

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The Postal Service is coming to grips with its diminished relevance in a digital society. The question is whether Congress will follow suit.

Electronic bill-paying and email have all but eliminated the ritual of pulling out envelopes and stamps to pay the rent or send a message to family and friends. As a result, post offices have less to do and officials are desperate to find an excuse to maintain bloated staffing levels.

Earlier this month, the Postal Regulatory Commission signed off on a test run for Metro Post, a scheme in which government mail would compete head-on with UPS and FedEx in providing same-day delivery service. Under the test, residents in certain San Francisco neighborhoods would be able to order items from an as-yet-unidentified online retailer before 2 p.m. and have the postman drop off the goods by 8 p.m.

The private shipping giants and local couriers already offer same-day service, but postal bureaucrats deny the goal is to leverage their monopoly position to cut into the private sector’s revenue stream. “Metro Post will not create an unfair or otherwise inappropriate competitive advantage for the Postal Service or any mailer, particularly in regard to small business concerns,” the post office wrote in an Oct. 12 submission to regulators. The pilot project could generate up to $50 million in revenue during the test period — money that would otherwise have gone into the pockets of private-sector entrepreneurs. When the state intervenes in the marketplace, such diversions are inevitable. Aside from putting couriers out of business, the online retailer who partners with the postal service will have a competitive advantage against other stores that have no special relationship with the postman.

A spokesman for UPS declined to comment directly about Metro Post, but the company has done extensive research into consumer demands. According to surveys, two-thirds of online shoppers wind up selecting the most economical delivery option — not same-day or overnight delivery. They’re most interested in saving a buck.

So it’s a bit odd for the post office, not known for its promptness, to jump into this new business venture without first getting its act together. The postmaster general recently reported losing $15.9 billion in fiscal 2012. In a statement, he begged lawmakers for legislative relief during a lame-duck session. Specifically, the head postman wants permission to cut service and underfund the lavish government pensions offered to its employees. Cost reduction measures under consideration include closing 229 of 461 mail-processing facilities that would delay delivery of 80 percent of first-class mail by one day. That’s in addition to the latest hike in the cost of a stamp to 46 cents and the proposal to eliminate Saturday delivery.

Congress should cut the strings that tie the hands of the Postal Service, but not without first releasing taxpayers from the obligation of covering for the substantial losses when its operations flop. That means lawmakers should finally repeal the 140-year-old statutes that make it a crime for private companies to deliver first-class mail. Doing so puts consumers in charge of deciding what they’re willing to pay for, and at what price. This ensures the public has access to the services they really need, not what Washington politicians think they should want.

The Washington Times

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