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Document 46 of 167.

May 19, 2000, Friday

SECTION: NEWS, Pg. 5D

LENGTH: 506 words

HEADLINE: U.S. POSTAL SERVICE CONFRONTS INTERNET

BYLINE: Lornet Turnbull, Dispatch Staff Reporter

BODY:

After shifting from steamships to locomotives to airplanes in delivering the mail the past 224 years, the U.S. Postal Service is now creeping onto the information superhighway.

The service is struggling to keep itself relevant as the Internet explodes around it, said Francia M. Smith, Postal Service consumer advocate, yesterday in Columbus.

The shift to electronic communication as more people turn to e-mail and online bill payments is cutting into the agency's core business.

In a report last year, the U.S. General Accounting Office warned that the growth in online bill payments over the next three years threatens $ 17 billion in annual postal revenue. That's the amount of money the service makes on first-class bills, statements and payments sent between merchants and their customers. It's also 25 percent of what the service makes in a year.

"Five years ago, someone sent me a note about this World Wide Web, and I looked at it and thought, 'Boy, that's a strange name,' '' Smith said.

"Now it's our life.''

The future of the service, Smith said, "is tied to our ability to translate our brand name in cyberspace and deliver messages, money and merchandise.''

Already this year, the service has introduced a set of tools intended to help it keep pace. Among them:

* USPC ebillpay. Subscribers with checking accounts can view some bills online and pay anyone online -- whether it's the telephone company or Aunt Sue.

* Electronic Postmark. Consumers add an

e-mail security feature for their messages.

"The postwar baby boom may not be real wild about doing transactions online, but the X generation and beyond live with this,'' said Smith, who was here for a postal customer council meeting. The customer council is made up of corporate customers across the country.

"We've got to be realistic and position ourselves in the key market areas that are our strength and our tradition,'' she said.

Legislative reforms proposed in Congress will allow the service to run more like a private company, with flexibility in areas such as product pricing.

Now, for example, it takes at least 10 months for the agency to get approval for new postal rates. Reforms would reduce that to 45 days.

Smith said the service needs to move quickly or risk being left behind. While the volume of mail handled by the service continues to increase, growth is at a much slower rate.

And, in the years ahead, officials expect volume to decline for the first time, as more people bypass traditional mail and turn to the Internet to view and pay bills. At the same time, competition will heat up among carriers wanting to deliver packages ordered online.

Foreign package delivery firms are joining the already-competitive domestic market, either by setting up their own operations or buying interest in existing U.S. companies.

Smith thinks the service has the home-court advantage.

"We're still the only people who go to every house, practically every day everywhere in the the United States,'' she said.

GRAPHIC: Phot, Francia M. Smit

LOAD-DATE: May 19, 2000

Document 46 of 167.


Search Terms: postal, reform
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