Is the U.S. Post Office obsolete?

The Thinker by Rodin

Recently I wondered if cash was becoming obsolete. After reading this story in the Washington Post, I get the feeling that America’s oldest public institution, the U.S. Post Office, is nearing obsolescence too.

The milkman became obsolete in the middle of the 20th century. Analog TVs will become collector’s items after February 19, 2009 and most will quickly end up in landfills. The incandescent light bulb is on a ten-year death march, thanks to recent energy legislation signed into law. Why should the U.S. Post Office not see the handwriting on the wall?

There is little doubt about it: the U.S. Post Office survives largely due to the largess of bulk mailers. They just love inundating our mailboxes with junk. If you are like me, virtually all of it goes into the trash. Now consumers want the same freedom from junk mail that they have from telephone solicitors. They are pressing the Post Office and Congress to let this new freedom ring. Since it sounds good for the environment and I hate bulk mail, I know I would be among the first to sign up. Such an action though would untie the Post Office from its financial moorings. It is bad enough for the Post Office that first class mail is drying up. I pay about half of my bills online and I expect that I am one of the technology laggards. Most of my other creditors just have not graduated to the 21st century. These include our lawn service and a number of physicians. I expect they will catch up soon. They will find it is much less expensive to collect money online and wonder why they did not do it years ago.

The personal letter is virtually obsolete. Once upon a time, my siblings and I sent around a chain letter. Since I have many siblings, it took about two months for a new batch of letters to reach you. About ten years ago, at my insistence, we gave it up. What was the point when we all had email addresses? A bimonthly bundle of letters at least had the virtue of making me sit down and write my siblings regularly. Today, we shoot out emails to each other all the time. Yet I can go three or four months before I trade much in the way of actual news. I still have one technologically phobic sister, but her husband does email so he makes sure she gets copies (as in “printouts”) of our emails.

As I remarked a couple years ago, the Christmas card is another tradition that is becoming obsolete. We still send them out, but I am not sure we will this year. Most of my siblings did not bother to send us one last year, but they did send us holiday email newsletters. It certainly was quicker and there was nothing to stamp. It did not quite have that personal feel to it though.

I still “mail” most of my packages through the Post Office, but that is largely from force of habit. My wife typically chooses FedEx. It is not that she chooses them because she needs overnight delivery. She chooses them because they tend to be cheaper than sending packages through the Post Office.

If the Post Office went out of business, magazine publishers would have to adapt. I am not sure they would survive. How would we get our copies of Time, National Geographic and Reader’s Digest? I bet publishers would find a way. Perhaps they would make deals with Starbucks and tell subscribers to pick up their copies there. It is hard to find any community so remote that it does not have a Starbucks. It would also increase their coffee sales, which have been slumping a bit lately. On the other hand, perhaps magazines would use pizza delivery firms. Dominos is also ubiquitous, and their drivers are probably in your neighborhood once a day. They could deliver magazines too, for a small fee.

Increasingly, the whole business model of the U.S. Post Office looks shaky, as evidenced by the expected $1 billion budget deficit this year. Junk mailers (excuse me, “bulk marketers”) pay a hefty premium to clog up your mailbox. I notice that many local businesses avoid using the Post Office. Instead, they work with companies that wrap their fliers inside other fliers, or with local free newspapers that stuff them inside their newspapers. Some companies simply pay people to walk through neighborhoods and leave them on doorsteps or door handles. Even my church is going electronic. It is part of their green strategy. I get my church newsletter in PDF format. They have not yet figured out a way to receive my monthly gift electronically. That will come.

According to the article, the U.S. Post Office is looking at unorthodox ways of paying its bills. If it can get Congress to change the law, you may see a Starbucks in your post office lobby soon. Who knows, maybe there will be a Subway there in time too. My suspicion though is that these are half measures that will not reverse the long-term trend. The Post Office already has gotten periodic bailouts from the government, but it is supposed to be financially independent. I expect that the Post Office will either become like Amtrak and depend on subsidies, or Congress will just pull the plug on this most venerable American institution. It had a good, long ride.

Its death knell may be postponed for a while. The U.S. Post Office still has a few features that cannot yet be met electronically. Email has no guarantee of delivery. Even if the email reaches an inbox, there is no guarantee it will be read. The same is true with junk mail, of course, but at least you have to look at it to determine whether it is a legitimate piece of mail before throwing it in the trash. There is no legal equivalent of registered mail in the email universe. I suspect in time that mail protocols will be upgraded to provide equivalent functionality. Email programs will be required to present the electronic equivalent of registered email. Moreover, since Congress will probably require it, email programs will probably be required to present any unsolicited mail that you agree to be paid to receive. Most of us might supplement our income with revenue from viewing email from bulk marketers. Most likely, our internet service providers will demand a cut of this revenue too. In any event, the financial winner will not be the U.S. Post Office.

Unless, the U.S. Post Office wakes up. About a decade ago, the U.S. Post Office had a program where it offered the electronic versions of registered and certified mail. It quickly went nowhere. It might be an idea worth reviving. If emails sent through the U.S. Post Office network were required to be presented in email boxes of U.S. owned ISPs, both ISPs and computer users would probably sign up because, like registered mail, it would have the odor of being “legitimate” email. For example, if you knew that some email carried a U.S. Post Office digital signature, which meant that the bulk emailer paid the U.S. Post Office for the privilege to send it, you might be inclined to allow such mail through, particularly if you got a small rebate to read the email. Similarly, if you needed assurance that a financial transaction was legally electronically delivered to a creditor on a certain date, you might gladly pay a small fee.

This might be a new business model for a 21st Century U.S. Post Office. Otherwise, I believe it will go the way of the milkman.