Copyright 1999 Journal of Commerce, Inc.
Journal of
Commerce
January 25, 1999, Monday
SECTION: EDITORIAL/OPINION; Pg. 4A
LENGTH: 717 words
HEADLINE:
Postal puzzle
BODY:
That is only one of the
oddities of America's postal rules, which reserve first-class mail as the
exclusive domain of the federally owned postal service.
With telephones,
fax machines, computer e-mail and private delivery companies making inroads,
this ""monopoly zone'' is becoming increasingly irrelevant. But under the
constraints of laws limiting its activities in the competitive market, the USPS
clings to its first-class monopoly like a lifeline. For the sake of the Postal
Service, if not for the rest of us, Congress should abolish the monopoly and
free the USPS to become a competitive global player.
Certainly, the USPS
has the size and scope equal to the task. It is America's largest corporate
employer, with 1998 revenue of $60.1 billion. Its 775,000 career employees and
200,000-plus vehicles deliver roughly 650 million pieces of mail a day. Over the
next 12 months the Postal Service expects to deliver more than 200 billion
pieces of mail - an annual record.
This transportation Gulliver,
however, is hobbled by Lilliputian laws that are much more restrictive than
those applying to its foreign counterparts. The Postal Service is forever
fighting legislative battles with its competitors to gain more commercial
freedom. That's a sharp contrast to the story overseas.
Consider the
recent record: Earlier this month Britain's Royal Mail said it will buy
Germany's fourth-largest private express delivery company, General Parcel Paket
Logistik. That announcement followed a spate of mergers involving Germany's
Deutsche Post, which has acquired 22.5 percent of DHL Worldwide Express and has
made a bid to take over Danzas, the giant Swiss freight forwarder.
The
Germans and British are not alone. Sweden and Finland have eliminated their
postal monopolies; Canada, Australia and New Zealand are moving in the same
direction. The Netherlands kicked off the scrimmage when its privatized postal
group, KPN, acquired TNT, the worldwide delivery company.
Some of these
new competitors now are showing up in the USPS's own back yard. The British,
Dutch and Canadian post offices already collect U.S. mail for delivery abroad.
Some also bring foreign mail into the United States and distribute it to
selected clients. What they do is legal, but it clearly is nibbling at the edges
of the USPS's monopoly zone.
And what has the Postal Service done? In
the global market it has done little. And on its home turf it has dug in,
insisting that it must have a monopoly over first-class mail if it is to offer
universal service, including deliveries in hard-to-serve areas.
That
claim is nonsense, as the German example shows. The German government took over
responsibility for such unprofitable deliveries, hiring the most efficient
contractors bidding for those routes. It pays them through a levy on all other
delivery companies. It's a fair system, and it works.
Not everything
about the transformation of foreign post offices is perfect. Deutsche Post, for
example, goes on its buying sprees with proceeds of the sales of public assets.
And KPN was allowed to use the revenue stream from monopoly services as
collateral when borrowing to finance its purchases.
Nonetheless, the
principle behind these deregulatory exercises is sound: Separate competitive
from monopoly services, keep monopoly zones to a minimum, and allow the
competitive services to function like businesses.
This Congress will
weigh a bill, sponsored by House postal services subcommittee chairman John
McHugh, that would do something similar. Rep. McHugh proposes to reduce the
monopoly zone from mail valued at $3 or less to mail valued at $2 or less, in
exchange for giving the USPS clear permission to run its competitive services as
it sees fit - provided no funds are used from monopoly services.
That's
a fair and balanced proposal. It's high time the Congress adopted it. The notion
of a postal monopoly has had a spotty career ever since it was introduced by
England's King Charles I as a way to raise money for his wars. For this and
other tax-raising schemes, among other reasons, King Charles eventually was
beheaded. We don't propose a similar fate for other supporters of America's last
legislatively sanctioned monopoly, but his example is worth considering,
nonetheless.
LOAD-DATE: January 25, 1999
