July 2, 1997

July 2, 1997 | Commentary on Political Thought

ED070297b: Postal Service Blues

You gotta hand it to the U.S. Postal Service: Neither rain, now snow, nor the dark of night keeps our intrepid mail monopoly from trying to crush Federal Express and United Parcel Service (UPS). Think about it: The postal service is an agency of the executive branch of the federal government that spent some $232 million in 1996 trying to convince us that its two-or-three day express mail service is just as good as FedEx and UPS's overnight service. The latest gimmick from the $60 billion a year (estimated 1996 revenues) agency is to lobby Congress to give it a freer hand to jack up first-class and other mail rates, producing additional money it could use to subsidize its other operations.

The scam is simple: If the postal service can fatten its coffers from its first-class mail monopoly, the additional funds would enable it to lower its "express delivery" prices and undercut the competition. That's what's really behind the postal service's latest request that the Postal Rate Commission approve a one-cent hike on the price of a first-class stamp.

Remember, the postal service has a monopoly on first class mail. You and I pay whatever it decides to charge because we have no place else to turn (Heck, I'm old enough to remember the 5-cent stamp!). The postal service's "other" operations, on the other hand, must compete with private companies, each of which must pay its own way, every day, in a very competitive environment.

As a free-market conservative, I have a philosophical objection to a governmental monopoly even being allowed to "compete" with private companies, because it's inherently unfair competition. But the "unfair" becomes the "unsavory" when the express intention of this quasi-government monopoly is to put the private companies out of business and throw their employees into the unemployment line.

Which is exactly what the postal service has in mind.

When Postmaster General Marvin Runyon appeared before the House subcommittee on the postal service last year, he actually bragged about his agency running some small delivery companies out of business.

The postal service's chief operating officer, William Henderson, has been even more candid. "Two-day Priority Mail is gold waiting to be mined," he was recently quoted as saying. "If we could make it two days, we could drive everyone out of business."

If you don't get the picture yet, listen to postal service marketing manager Dave Shinnebarger, who told the National Postal Forum a year ago that "I really believe I was put on this earth to help UPS have financial difficulties. I think that's my mission."

Oh really?

In the grand scheme of things, of course, putting Airborne Express, FedEx and UPS workers out of work might be good for postal service business. Just imagine how many more "overdue" notices and "final" notices credit card and mortgage companies will have to mail out when the pilots and delivery people who now work for these companies can't pay their bills.

Let's all agree that competition is great. I am a true believe in competition. But American companies shouldn't have to compete against their own government -- especially when that same government awards itself all the advantages. The postal service doesn't have to pay the same sales, property, income and other taxes or follow the same regulations private companies do.

Fine: If the U.S. Postal Service wants to compete against FedEx and UPS in the express delivery business, then these private companies ought to be allowed to compete with the postal service in delivering first-class mail.

After all, fair is fair.

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7/2/97

Note: Edwin J. Feulner, Ph.D. is president of The Heritage Foundation, a Washington-based public policy research institute.

About the Author

Edwin J. Feulner, Ph.D. Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
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