Copyright 1999 Gannett Company, Inc.
USA TODAY
September 28, 1999, Tuesday, FINAL EDITION
SECTION: NEWS; Pg. 17A
LENGTH: 1693 words
HEADLINE:
Worried rivals: Wait a minute, Mr. Postman Postal Service's bold plans go beyond
delivering mail
BYLINE: Haya El Nasser
DATELINE: WASHINGTON
BODY:
WASHINGTON -- Soon, the mailman might be showing up at your door
with
more than the usual bills and junk mail.
Think groceries,
prescriptions, dry cleaning, flowers and even
video rentals, courtesy of the
U.S. Postal Service. And, you might
get e-mails along with your starched
shirts and carnations --
even if you don't own a computer -- thanks to a
postal e-mail
address that could be assigned to every household and
business.
This 21st-century vision of the Postal Service is a
colossal leap
from the Norman Rockwell images of the postman carrying a
tattered
leather satchel overstuffed with handwritten letters. But it's
a tiny step from what the Postal Service is ready to do to survive
in
this age of instant and paperless communication.
For the Postal
Service, an institution that depends on the delivery
of letters and packages
to every one of the USA's 130 million
addresses, the Internet is the
greatest menace since the telephone.
After all, who needs mail when "you've
got mail," e-banking,
e-shopping, e-trading and even e-greetings?
Almost a third of the Postal Service's $ 62 billion in revenue
last year came from the first-class mailing of bill payments.
But
on-line banking, which allows people to pay electronically,
is starting to
take off. Both federal and state governments are
starting to make benefit
payments, such as Social Security, by
electronic transfers instead of
checks. More taxes are filed on-line
and more refunds deposited directly
into bank accounts electronically.
More companies are requiring
vendors to conduct electronic transactions.
The Postal Service is
used to competition. Since the days of the
Pony Express, new technologies --
from the telephone to the fax
machine -- have taken bites out of postal
business.
"But folks, this is different in a very, very big way,"
Gene
Del Polito, president of the Advertising Mail Marketing Association,
says of the Internet. "It's absolutely the biggest threat."
It's
such a threat that it may lead to the first major postal
reform in 29 years. The unfolding e-revolution is so drastic that
it's stirring the debate about whether the Postal Service, a government
agency, should be allowed to compete with private businesses in
ventures
that have nothing to do with delivering the mail.
U.S. Postmaster
General William Henderson says that if the Postal
Service is not revamped,
its ability to deliver mail to everyone
cheaply -- one of its congressional
mandates -- is in serious
jeopardy. After years of losses, the Postal
Service began making
a profit in 1995, but net income has dropped every year
since.
Needs modernization
The Postal Service "really has
much less chance to survive without
modernization," Henderson says. "And if
we weren't around, the
U.S. consumer would suffer dramatically."
The prospect of dwindling revenue is pushing the Postal Service
to go after cyberprofits any way it can. Already, these ambitious
plans
are unnerving some in Congress who believe the Postal Service
should stick to delivering the mail. Postal reforms are
being
debated on Capitol Hill.
And private competitors such as
United Parcel Service are lobbying
furiously against any
reforms that would give the behemoth Postal
Service a competitive edge. UPS is even challenging some of the
Postal
Service's new services in court.
But Henderson is forging ahead with
various e-ventures that, so
far, do not require approval from Congress and
other oversight
boards. Today, he announces a marketing deal with
Amazon.com,
the largest e-retailer.
Aware of increasing
competition, the Postal Service is doing other
things to hang onto its
formidable franchise: a monopoly on the
delivery of mail to every address
six days a week.
It has expanded its hours (some post offices are
now open even
on Sunday) and used robotics to speed mail sorting. By all
accounts,
it has even succeeded in cutting the lines at post offices by
challenging employees to process retail transactions in 5 minutes
or
less.
To keep up with private competitors, it began offering
delivery
confirmation for all priority-mail and parcel-post shippers. And
just last month, it joined forces with two Internet start-ups
to
introduce e-stamps, a way for people to print stamps at home
or work.
But what the Postal Service is toying with now is much bolder:
* An e-mail address for every postal address in the country.
That means every household and business in the USA could be
reached
electronically, regardless of whether it has a computer.
A marketer, for
example, could send electronic mailers to every
e-address. The Postal
Service would print the messages and deliver
copies to addresses that don't
have computers.
* The option of receiving and paying bills on-line.
In
a sense, the Postal Service would link businesses and banks with
consumers.
* Electronic document delivery. The Postal Service is
promising
a high-security way of sending sensitive materials, such as
architectural
or financial plans, electronically.
* Delivering
more than the mail. The Postal Service is
designing more secure, locked
mailboxes for delivery of everything
from video rentals to groceries.
Henderson says mail carriers
have to stop at every address every day anyway.
It makes sense,
he says, to get more out of every trip.
The
Postal Service also is talking to mail-order retailers about
an added
service: "This is a blouse that you didn't want. We're
going to scan it and
we're going to tell L.L. Bean that you have
a blouse that you're returning,
and L.L. Bean is going to tell
us where they want that blouse," Henderson
says. Retailers could
decide to have the merchandise sent directly to a
liquidation
warehouse or discounter rather than back to them.
But just how innovative the Postal Service should get is being
debated on Capitol Hill.
The 224-year-old service has operated
without taxpayer subsidy
since 1982. It's supposed to run like a business
but is still
very much a government agency. It's controlled by a nine-member
board of governors (all political appointees) and is under close
congressional scrutiny.
The service can't increase rates without
the blessing of the Postal
Rate Commission (again, politically appointed), a
process that
can take a year.
But the Postal Service does have
advantages that competitors don't.
It has a monopoly on first-class mail. It
doesn't pay corporate
taxes or real-estate taxes on buildings it owns; it
doesn't pay
for license plates or even parking tickets And it has access to
low-rate government loans when needed.
Competitors say those are
advantages that should keep the Postal
Service from getting into other
businesses.
"We're prepared to compete with the Postal Service on
any front,"
UPS spokesman Tad Segal says. "But we want it to be a level
playing
field."
UPS says the Postal Service's monopoly on
domestic mail is subsidizing
other ventures. The Postal
Service denies that.
Postal reform
This
debate continues on Capitol Hill, where Rep. John McHugh,
a New York
Republican who heads the House Postal Service Subcommittee,
has introduced
the Postal Modernization Act of 1999.
The bill would let the Postal
Service compete with private businesses
by giving discounts to bulk mailers
and expanding delivery well
beyond letters and parcels. But under the bill,
any "unpostal
commercial activity" would have to be carried out by a
separate,
private corporation that would pay rent, taxes and every other
cost its competitors face.
"If all they can do is deliver
first-class mail, that paints
a very bleak future," McHugh says. "Either the
cost of that
first-class stamp is going to explode in years coming or
they'll
automatically have to cut back on services . . . perhaps
dropping delivery to five days or four days a week or less."
Even worse, he says, taxpayers might have to start subsidizing
the Postal Service again. "That's not feasible."
Critics still
worry that the Postal Service would use first-class
mail revenue to fund
businesses they shouldn't get into. "Delivering
goods is no problem as long
as it doesn't come at the expense
of the 33-cent stamp," says Rep. Steve
LaTourette, an Ohio Republican
on the postal subcommittee.
But even LaTourette agrees that postal reform is
needed in light
of new competition.
Jim Campbell, a Washington,
D.C., lawyer who represents private
shippers such as Federal Express, says
Henderson faces an uphill
battle in Congress and in the marketplace: "It's
kind of a stretch
to say that e-commerce is postal service."
But
if the national Postal Service can't survive in 20 or 30 years
and mail
delivery falls into the hands of private companies, it
wouldn't be the end
of the world, Campbell says: "What's wrong
with that, if that's what people
want? The U.S. Cavalry is gone,
too."
Henderson strongly
disagrees: "The disenfranchised in the United
States certainly wouldn't get
the same kind of break that a highly
dense area would. The Postal Service
has universal rates. It goes
everywhere. We go to places where it's not
profitable."
TEXT OF INFO BOX BEGINS HERE:
World's largest
mail deliverer
The U.S. Postal Service:
* Delivers more than
650 million pieces of mail each day.
* Handles 41% of the world's
mail volume. The second-largest deliverer
is Japan, with 6%.
*
Employs more than 775,000 employees, and is the nation's largest
civilian
employer.
* Operates more than 38,000 post offices.
*
Delivers to 130 million addresses six days a week. Last year,
293,000
carriers each delivered about 41.5 tons of mail. That's
equal to 10 average
male elephants.
* Serves 7 million customers who visit post offices
daily.
* Clocks 1.1 billion miles every year as drivers deliver the
mail.
That's equal to 2,300 trips to the moon and back.
* Did
more than $ 200 million worth of business each day last year.
One day, it
set a record of $ 554 million.
* Processes about 43 million address
changes every year.
Source: U.S. Postal Service
GRAPHIC: PHOTO, B/W, Jocelyn Augustino for USA
TODAY; Henderson: Postmaster says that unless his agency can offer new services,
its ability to deliver mail cheaply will be jeopardized. 'And if we weren't
around, the U.S. consumer would suffer dramatically.'
LOAD-DATE: September 28, 1999
