Post-postal

Imagine an America in which everyone has an internet connection, a device to use it, and a printer.

Ruth Goldway, the chairman of the U.S. Postal Regulatory Commission, imagined such a world when the head of the U.K.’s Royal Mail International asked at an industry conference a year ago what Google would do with the Postal Service. Goldway (who hadn’t read my book) replied, “They’d give every household a computer and a printer.” (And I’d add, of course, a broadband connection.)

Goldway was just speculating. As someone who believes in the Postal Service’s universal service obligation, it makes sense that she’d wonder about universal connectivity.

Now — as is my habit — I’ll take it farther — too far — and ask: When we all are connected, do we need a Postal Service? Or what kind of Postal Service do we need? What still needs to be delivered? What are the economics of that delivery — who’s being served and who should pay? Do we still need daily (let alone Saturday) delivery? Do we need to guarantee physical delivery to every address in America? How much could we save? Can the market take over delivery of things while the net takes over delivery of information and communication? What’s the impact on publishing and advertising, on retail, on education?

These are fascinating questions I’ve been tossing back and forth with a new friend, John Callan, a high-level consultant in the delivery industry. He did read my book (and gave Goldway a copy) and came to visit me to talk about the post office in the Google age. Callan, his colleagues, and I are thinking of holding an event to explore these questions and opportunities.

The Postal Service is forecast to lose $7.8 billion in 2010. A USPS presentation here reveals the dynamics: a 17% decline in volume from ’06-’09; a forecast 37% drop in first class ’09-’20. With its universal service obligation, the USPS has to deliver to 150 million addresses a day. With its post offices, it has 36,500 retail locations, more than McDonald’s, Starbucks, Walgreens, and Wal-Mart in the U.S. combined — and it’s not allowed to close offices for economic reasons. Its retiree health benefits alone cost $5 billion a year. Dropping Saturday delivery, as has been proposed, would save $3 billion a year — but that doesn’t solve the problem. Federal Times says the USPS is “officially in a panic” (not a bad thing, I’d say) because it could lose $250 billion in a decade.

The US Postal Service as we know it is, in a word, like much of the rest of the economy disrupted (or, if you prefer, doomed). I think it’s time to ask the radical question: Do we need it?

If all of us are connected, we don’t need the USPS to deliver letters; email is precisely the reason that first class mail is already plummeting. We consumers are, in my view, subsidizing the delivery of advertising because 71% of the USPS margin available to cover its costs comes from first class, only 21% from advertising. Yet in 2009, the USPS delivered an equivalent number of ads vs letters and by 2020 it will deliver far more ads (86 billion ads vs. 53 billion letters, according to the USPS projection). Should an ad-delivery service be the province of a government-anointed entity? I don’t think so.

So let’s zero-base the Postal Services’ services: Once more, information and communication can be handled electronically. Commercial delivery should be handled commercially. There will be an increase in parcel delivery as more and more retail moves online; that’s a profitable business the market should take over. Junk mail should pay full freight — if it is still delivered once mobile becomes a better, more targeted, and more efficient delivery mechanism for coupons and such (and if do-not-mail lists threaten to cut their volume). Magazines? Sorry, but I don’t really want to subsidize their businesses — and besides, tablet triumphalists insist we’ll be using iPads before you know it. Do we need six-day-a-week delivery to every one of 150 million addresses in America then? No; delivery of things is made on an as-ordered basis. What about out-of-the-way addresses (see: Sarah Palin)? Maybe that requires some subsidy, but that would be minimal.

What about the post offices? The USPS presentation shows far lower costs if these services were run through partners (e.g., other retailers), online, and self-service machines.

What about delivery of government paperwork? Well, it’s ludicrous that we’re not given the option to fill out the census online. We are shifting our taxes online.

Mind you, I have nothing against mailmen anymore than I have anything against pressmen. It’s just that they work in antiquated industrial structures and we can find not only efficiency but improvement of service thanks to digital — if we are all connected.

That is why I wish the FCC broadband plan went farther faster (as is happening elsewhere in the world), assuring everyone a high-speed connection quickly. This examination of the Postal Service is just one example of the impact universal connectivity would have on the economy. Some of that impact is painful — lost jobs, severance cost, unused real estate, mothballed trucks. But much of that impact is positive — improved service, reduced costs, reduced environmental impact, new opportunities, new entrepreneurship, new innovation. New companies would emerge to take up the opportunities this change presents, creating new jobs and value.

That’s why I was so impressed with Chairman Goldway’s answer to the WWGD? question: Rather than trying to paddle against the flood, she was at least willing to at least wonder about going with the flow.

I’ll ask: What happens if we spend capital not on money-losing, dying institutions (repeat: $250 billion losses over a decade) but on subsidies to get every American connected? If we fully examine the opportunities that presents, it could have a profound impact on policy, budgeting, and many sectors ofsociety. Let’s model that impact on the economy.

So Callan and company and I would like to get together both incumbents and entrepreneurs to imagine the near-future world of delivery after digital ubiquity. I’d like to continue the discussion with other sectors: newspapers and media, obviously, but also education (how would it change if every child were connected and equipped?); retail; real estate (what happens when all that retail leaves its brick-and-mortar stores?); financial services (why the hell are banks still building branches?); government; and on and on. That is what should inform the policy debate over broadband policy: Let’s map out all the opportunities — for entrepreneurial innovation and growth, for savings, for improvements in life, for export value — and let that inform the resources and speed we put into universal broadband.

What do you think?

  • http://butterflyhunt.tumblr.com/ Ernesto

    I guess it’s key to know who is ‘we’ when we say “when we all get broadband…”.

    Postal services are never only national; it’s an international network, if one stopped working you are closed off to the rest of the world. So let’s suppose the US could get rid of US Mail and substitute it altogether for online services: fine, but what about the rest of the world that still relies on the post, where it is still more democratic than Internet access? What about online businesses that rely on the post (and not private courier services) to deliver their physical (i.e. not digital data) goods?

  • http://robinrowland.com Robin Rowland

    The flaw in this argument is that post offices, worldwide, as public services/ public utilities are in the “delivery business” and have a mandate to actually deliver the goods. Commercial courier companies on the other hand are in the “shipping business” and as most people who have dealt with couriers know, don’t actually care whether or not the item actually receives its intended destination. That’s because it is the sender who pays the courier, not the person receiving the product (who actually paid the shipper for delivery).
    In the past few years most courier companies have gone to one chance delivery and then tell people they have to drive up to 40 miles to pick up a package that should have been delivered to their home or the package will be returned to the shipper. (Of course corporate and university offices that have shipping/receiving departments don’t have that problem)
    UPS, for example, charges extortion level brokerage fees for packages crossing a border. Post offices don’t charge that level of fees. You can Google that for details :-), including a class action suit that was filed against UPS in Canada. You can see notes on EBay and other sites where experienced US shippers use say “we don’t ship outside the US by UPS” to actually attract customers.
    A few years ago here in Canada, a right wing think tank suggested privatizing the post office. The joke that circulated immediately that is that we would all have to fly to Bangalore to pick up our mail.

  • http://twitter.com/michaelproctor Michael Proctor

    As e-commerce and online retailers become more common, I would love to see the innovation they come up with for delivery systems. This innovation could be sped up by removing the postal service today, or privatizing it.

    But I’m glad they are “officially in a panic”. It is good they realize there is a need to change.

  • John Button

    Unfortunately, not All of us will ever have broadband… nor the printers or whatever digi-device to send it printable stuff. That is a hard fact! Whether due to accessibility or choice, broadband will not be in everyone’s pocket or home.

    There will always be a need to deliver and receive hard copies of letters, magazines and yes – ads, as well as everything else made of mere atoms… if only because some will desire and choose to.

    I suspect over time the delivery system will evolve into what or how I couldn’t say..

  • http://www.millsworks.net Robbo Mills

    What the post office delivers is neutrality. Any government run system of communication should provide just that. If it can’t be done through a particular office, department or ministry (having a separate internet just for that is just dumb) then it needs to be provided by regulating the existing infrastructure of the net to provide what is required of a post office that has evolved into a net entity – the guarantee of neutrality.

  • Mike Price

    When any government entity gets in a panic it looks toward raising revenue, rather than becoming more efficient. It’s not in their genes to do otherwise.

    How would we deliver internet to everyone? Give everyone a computer?
    I think not…The pawn shops would be full of free equipment within a week.

    • Rodger R

      The post office should be made to down size along w/the decline in volume of work it has available.
      I believe it was Al Gore who got us started on the path of providing broadband to everyone, see the tax on your mobile phone bill.

  • Paul

    Interesting article. I live in Canada where there is no weekend mail delivery. In fact I can’t remember a time when there was. I can’t imagine a piece of mail being so important to the average person that it can’t wait for Monday delivery.

    If a $3M savings can be achieved by cutting weekend service that’s a no brainer. Especially in this day and a age.

    I wonder how many people actually go to their mailbox on the weekend? I wonder what the real mail (letters, packages, parcels etc.) to junk mail ratio is on a weekend run? I’m sure if they engage the public with an unbiased, simple questionnaire they would get some valuable feedback.

    Mail delivery is a business like any other business. If the profits don’t work out you have to make changes. You can’t keep running a business in the negative.

    With the technological advancements we’ve seen and will continue to see, these types of decisions will need to be made the near future.

    Corporate Executives need to look ahead and make decisions that keep their companies profitable. Isn’t that just part of leadership??

  • http://everything-everywhere.com Gary Arndt

    This will never happen. The postal service has nothing to do with delivering mail so much as it is a mechanism for providing postal union employees jobs. As such, it doesn’t matter how much money it loses. The Federal Government will subsidize it.

    Read the work of Nobel Laureate James Buchanan and Gordon Tullock who did work created the theory of Public Choice. Efficiency and savings have nothing to do with any decision making. It is all about appeasing groups to stay in power.

    • Sheryl M

      The Federal Government does NOT subsidize the USPS and I doubt it will ever go back to be tax-supported. Also, if USPS has nothing to do with delivering mail why is it they deliver more in one day than UPS and FedEx do in a year? USPS also delivers almost 50% of the world’s mail.

  • Daniel Vogelsong

    This is one of those reasons I, like the lovely Gina Trapani, love Wave. The reason Email is clunky is because the current mail system is, and always has been, clunky. Mail (Electronic, or physical) that we get now can be divided up into 2 categories – Conversations, and non-conversations. Non-conversations are things like ads & distributed mass info, like a feed, while conversations are between two or more entities that have some knowledge of each other, like a Wave. The problem is we don’t look at the information coming through our inbox or mailbox as Waves & Feeds, we look at it as this generic hodgepodge known as ‘Mail.’

    The USPS should lead the way in the elimination of ‘mail': Packages & parcels are one thing, but everything else is simply waves & feeds, and can be moved to the much cheaper realm of the internet. US-wide universal whitespace WiFi is one way to do it, I’m sure there are other venues. However, it will never simply vanish: as long as there are troops overseas, as long as there is international shipping, as long as there people who want nothing to do with “them dern computers”, there is a necessity for a Post office in some form.

  • http://www.google.com/profiles/claudio.f.ibarra Claudio I.

    Some excellent points, although the FCC may not be the answer. They’re still busy making sure every person responsible answers for Janet Jackson’s nipple.

    From my (limited) understanding, the USPS is not tax funded. Where can I see what subsidies they are getting from the federal government?

  • http://butterflyhunt.tumblr.com/ Ernesto

    Some food for thought: Roy Mayall, a postman, on the London Review of Books’ Diary. (Please read the comments too…)

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  • Papergeek

    It is a no brainer to eliminate Saturday delivery by the Post Office. Maybe there should be mail delivery four days per week. It’s true that an electronic mail world could be developed and in theory everyone could be “wired”. However, the electronic world is already very crowded and it may not be my choice on how I want to deliver whatever to whomever. Since I have been in the printing and paper businesses for 46 years I may be a bit prejudiced but I believe there are benefits to delivering a message in a substantial form: Ink on paper.

    That choice should be made in and by the marketplace. It is very inexpensive to send a “message” via e mail to large numbers of people. That is one reason we all get more than we want. Sending a piece of direct mail may cost more but it also may get better results. Such decisions are and will be made by the the one who hopes to sell something or convey a message. How the delivery is made is another discussion.

    As a freedom loving person I do not like a small number of people making decisions that impact large numbers of people, especially when it involves public money.

    The Post Office needs to figure out how to survive in a world that does not need all the services it offers. (Just like us paper people.) That may mean fewer days of delivery and or higher postage rates. The market will figure out how to best communicate no matter what the USPS does.

    Count me as one who still looks forward to getting several magazines each month. Sitting in a comfortable chair and reading something like Hemmings Muscle Machines or First Things is an experience I have not had with any electronic device. BTW: I also enjoy looking at old car classifieds on line or joining in a discussion such as this.

  • http://www.ursamajorassociates.com John Callan

    The problem with the Postal Service is simple. It operates a volume-driven business model and the volume is dying. Hence the model is dying. It is simply not sustainable.

    But the solution is far from simple. It is, in fact, extremely complex. A real ‘business’ would simply cut costs by cutting back its resources in proportion to its income. Painful as it would be, it would lay-off workers, reduce benefits and pensions, close facilities, moth-ball its fleet, etc. It certainly would curtail ‘universal service’ to every address six days a week. And if it were smart it would re-group, re-invent and transform itself into a new operating model. But, the USPS is not a real business even though Congress expects it to act like one. It needs a literal ‘act of Congress’ to enact these sorts of responsible corporate tasks and Postmaster General Jack Potter is responsibly asking for that permission.

    The fact is that USPS does its job extremely well, probably better than any other national postal service, privatized or not. Mail delivery in our country is one of our greatest entitlements. Our service is far less expensive than all other major posts and we get more of it in frequency and outlying delivery. And, it is not subsidized. At least not yet. While volumes were up and still growing into the early part of the last decade, The Postal Service actually made money and retained a surplus. But if it continues to lose money at the current and projected rate, some form of subsidy is going to have to come from somewhere.

    The only really encouraging USPS operating product model that seems to work is parcel delivery, driven by growth in etail shopping. And ironically its success is increasingly dependent upon its arch competitors FedEx and UPS who market national residential delivery services, transport consolidations of parcels to post offices nearest to delivery points and then hand-off to USPS for letter carriers to make the ultimate household deliveries. It’s actually a healthy partnership program which some see as a defacto means of privatization. Priority Mail, thanks to an effective flat-rate box campaign seems to also be succeeding, but as long as all these parcel products get delivered by letter carriers their cost structures will ultimately be impacted by declining letter volume too.

    By its own assessment, with the advice of top consultancies, BCG, McKinsey and Accenture, the U. S. Postal Service is simply not sustainable in the current model. The projected losses are insurmountable. It is headed for disaster.

    The USPS rammed an iceberg during the recent recession. Even though First Class personal and business transaction mail was declining moderately in the face of e-substitution, ‘junk’ advertising Standard Mail was growing. But driven completely by discretionary marketing budgets, this ad-mail volume plummeted in the recession and will never achieve former levels. Personalized higher valued direct mail will find its place thanks to new digital marketing software and variable distributive print technology, but this will still mean fewer pieces.

    So now what to do? Rather than re-arrange the proverbial deckchairs on the Titantic as the band plays on, the Postal Service must be rescued from afar. It is incapable of rescuing itself. And whatever survives and is salvaged may be quite less and unlike what we know today. This is where I wholeheartedly agree with Jeff’s daring approach to ‘imagine an America in which everyone has an internet connection, a device to use it, and a printer”. Not that this is the literal answer, but that bold and imaginative thinking like this comment of Chairman Goldway’s is required.

    I work in this space and am concerned about yet one more sinking American institution. This is why I came to Jeff for new ideas. I read his book and was thrilled by his insight into what made Google what it is. Think platform. Think network. Think distributed. Think USPS? Yes! But think open-source. Think mass of niches. Think transparency. Think beta. Encourage, enable and protect innovation. Get out of the way. Think USPS? Hardly!

    Can a nearly 250 year old government-owned institution be expected to think like Google? Let alone act like Google? I want us to ask What Would Google Do? And we will listen to all sorts of creative ideas.

    Let’s try to imagine what a postal service should look like in 2020 and beyond. What would we want it to do for us? More importantly, what would the next generation Millenials want it to do for them?

  • http://blog.stealthmode.com francine hardaway

    It’s mysterious to me that the Post Office hasn’t already disappeared, or been merged with FedEx or UPS.

    I guess at one time we needed a “utility” to deliver mail and packages, but now we probably don’t. Between the digital age, the ubiquity of advertising, and the grow of package services, the post office is like a big dead tree that is just taking a long, depressing time to fall.

  • Eric Gauvin

    Jeff Jarvis goes postal.

  • http://bangordailynews.com Todd Benoit

    Thank you for raising this provocative question. As several people have pointed out, not everyone has access to broadband or will have it soon. This is often a rural issue, and it raises what I think is an interesting question about how and why the federal government subsidizes rural America.
    Part of the reason, of course, is political — here in Maine we have two senators for 1.3 million people while California has only the same level of representation for something like 37 million people — but the subsidies also have to do with how we see ourselves as a country.
    When it comes to technological advances that might be more easily adopted in urban and suburban regions, to what extent should these advances be held in check to ensure continued traditional services to rural areas? How should rural areas be subsidized so they can enjoy the benefits of the technology? Should government policy incent people to move to where government can most affordably serve them?

  • Harry5

    The government is working hard to increase connectivity, but in no way will it just wipe out the Postal Service because of a few bad recession years’ finances.
    The Postal Service doesn’t receive tax subsidies, so the government can’t just withdraw its assets and turn them over to funding universal connectivity.
    A lot of people and businesses still rely on the Postal Service-it’s a trillion dollar industry that employs 8 million people. What kind of transition would that be? Harsh, I warrant.
    No matter how much you rationalize it, the Postal Service, a totally unique organization will not just go away and be used to pave the way for the Internet and for-profit delivery companies to try to take its place-they can’t do it.
    The universal delivery performed by the Postal Service covers physical addresses-the gateway to the American family. Connectivity is mobile, and therefore, connects to individuals. It’s a very different proposition, and it’s not an either-or deal.
    Americans love to have options, and with both the Internet and a Postal Service, it’s a great climate for free choice and supports business development by keeping shipping prices reasonable and Internet providers from charging more for the privilege of sending email.

  • http://technowaffle.blogspot.com Ronan Gruenbaum

    As the U.S. does, so will – almost inevitably – the U.K. follow.

    However, the service provided by the UK Post Office is not the same as that provided by FedEx, UPS and the rest. At which point is the Post Office a public good? The ability to send, at a reasonable cost, a letter to anywhere in the territory…rather than charging a low price for the volume-driven urbanites and milking the long-tail of rural dwellers for whatever they can get… could (and in my opinion, should) be ensured.

    This would make the business unattractive for the likes of FedEx and UPS…who have been creaming off the highly profitable segments of the market and leaving the dogs to the Post Office. What happens to the dogs in the long run?

  • Sheryl M

    While a “computer & printer in every home” is a nice idea, it will take decades to achieve it. Not everyone wants a computer or is willing to learn to use one. Should the government force them to become computer literate? And while email is okay for short blurbs & forwarding jokes, I still prefer a paper greeting card or – gasp – even an ocassional real letter. Advertisers have learned that email and web advertising doesn’t replace those by mail either, as most of us simply delete everything in our “junk” email box without ever opening it. An envelope with a catchy phrase has a much better chance of being opened and read. Privitization isn’t the answer either since there isn’t anyone who wants to deliver to every address at the same price – that’s why UPS, FedEx, et al have surcharges for residential and rural and inner-urban addresses as well as fuel surcharges and more. Granted USPS will be different in the future but I think it will still be a part of America’s communication network.

  • http://www.quotablediatribe.squarespace.com Greg

    Until we have transporting technology, which should be coming just after the flying car, we need a postal service. It strikes me that no where in the discussion about the Post Office’s future is the question asked “why do we need to run the Post Office like a business?” Well, why? The Constitiution does not say that this branch of the US Government needs to be a profit center. I don’t expect my library to make money, nor the fire department, nor the police. These are services paid for by tax dollars for the benefit of all. I personally do not care that over the next decade the Postal Service will lose $x100 billion. Millions of letters are sent at reasonable prices, on the whole it is a very fair deal and we’d be bad people to change it for profit’s sake.

  • Jamie Murdoch

    In my opinion, what really needs to be done here is simply open up this sector to the forces of the market. Over the years, our economy has developed to the point where post offices are no longer a critical part of our economy that must function; there are other faster and more reliable ways to share information. Instead of subsidizing what will become largely advertisements in ten years with taxpayers money, we should allow creative destruction to take its path.
    The key difference between the post office and other public goods such as fire departments and libraries cited above is that these goods have proven positive externalities which are not reflected in their cost. Libraries for example, benefit not only the people who use them to learn but also others who benefit from a more educated society. Post though no longer has any significant positive externalities. Before the internet, it used to be that our society benefited greatly from the transmission of information, but this is no longer relevant. The post office has become a classic example of over allocation of resources, and should be forced to operate on its own.

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  • http://butterflyhunt.tumblr.com/ Ernesto

    “Before the internet, it used to be that our society benefited greatly from the transmission of information, but this is no longer relevant.”

    [my emphasis]

    It is truly essential the United States and other developed nations start realising that the world is wider than their own access to broadband.

    I do not deny there is an urgent need to modernise and redefine the functions of postal services across the globe. What remains a fact is that they are all connected. What the US does or stops doing affects other peoples, far away from you, people you may never hear about, precisely because they do not make their voices heard using the same mechanisms you do.

    So you don’t care about everyone else then, than’s fine. Even within the United States there’s folk that will be cut off the world without the post unless a very radical policy of digital media equal access/literacy is implemented. But those folk obviously don’t count, do they?

  • Jamie Murdoch

    To the person above me, you make it sound as though it will be the end of the world if these people do not have access to government subsidized post offices six days a week. I am not proposing that we shut down all post offices. All I am proposing is that we open the industry to open markets. Do these people really need Saturday delivery? If it is worth it to them, they can pay an increased rate for it. If not, then they can suffer through delivery four times a week, and the government can save billions of dollars to put into education, healthcare or even tax cuts. Even better, as more people become computer literate then this will be communicated to the post through market forces, the amount of letters sent. Instead of being rigid to these forces, the post office should be allowed to respond to them in order to produce a optimal allocation of resources.
    So the post would still be available, but at a more reasonable rate and not at the cost of taxpayer’s money.

  • http://www.ursamajorassociates.com John Callan

    Sheryl M (see above) is right, when she says; “Advertisers have learned that email and web advertising doesn’t replace those by mail either, as most of us simply delete everything in our “junk” email box without ever opening it. An envelope with a catchy phrase has a much better chance of being opened and read.”

    Savvy marketers are using a well coordinated multi-channel mix of messages, all very targeted and personalized. Direct mail is one essential channel. And, if USPS can learn from Google, maybe Google cam learn from USPS! Imagine if Google were to take what it knows about our personal interests from search and gmail, match our email addresses to our street addresses and add direct mail to their multi-channel marketing mix!!

    Btw, Direct Mail is a $45 billion industry, per industry experts Winterberry Group, and having hit bottom after a disastrous 20% drop 2009 it is projected to grow 2.5% this year and remain steady going forward. This business is not going away fast, but it’s make-up will change drastically from unwanted single channel impersonal low-value junk mail to highly targeted personalized hig-value multi-channel messaging.

    Getting back to the elephant in the room, however, with all due respect to Winterberry, this direct mail channel, as desirous and essential as it is to the marketing mix, will only exist as long as USPS has the funding to continue to deliver to 150 million addresses each delivery day.

    So when we ask What Would Google Do about the Postal Service, I’m now thinking we should also ask What Could the Postal Service Do for Google!?

  • Jill Faulkner-Bogdan

    I love the replies that discuss the marketing, the money, the tax dollars, and the politics behind shutting down the USPS and I would truly love to chime in on that vein but what this post really made me think of is my Grandparents. My Grandma for example, she is young at heart and lives a relatively modern life, she has a cell phone, a GPS, and a digital camera. My Grandpa, before he passed, had a cell phone and a computer equipped with broadband and an e-mail service. But make no mistake my grandparents have and likely always will be dependent upon the USPS. Over the years they used the mail to pay bills, to send birthday cards & Christmas packages, to keep in touch with their children overseas in the military, and to remain connected with old friends that had moved on over the years. My grandfather actually kept in touch with a fellow WWII veteran for more than fifty years with a little help from the USPS. The simple fact that I am making is that even if computers and all the communication possibilities they hold are available to everyone everywhere, it doesn’t mean that people will have any idea how to take advantage of those possibilities and it’s not fair to cut off people from an older demographic simply because they don’t use or understand technology in the same ways possibly younger, more technologically advanced people do. I am not saying that people shouldn’t learn more about technology and embrace the positive changes it can bring I’m simply saying they shouldn’t be forced to be disconnected because their means of communication is no longer turning a profit.

    In addition to giving everyone a computer and a broadband connection is someone going to teach EVERY person in the world how to use a computer for the things they previously used the mail for?

  • http://www.decisionanalysis.net Pierre Kacha

    Reading all posts with great interest, but coming back to Jeff’s initial request to “imagine the near-future world of delivery after digital ubiquity”, I would like to suggest a departure from the focus on ‘deliver’ towards the focus on ‘connectivity’.
    USPS, throughout its history, was in the ‘connection’ business – “binding the nation together”. Can it still continue to be the great connector that it used to be? Well, it all falls in how we define connections

    – can a delivery unit (the back side of the post office) serve as a warehouse to connect an appliance manufacturer with its service repairmen?
    – can a post office serve as a connection between citizen and other government services (e.g., a real, rather than virtual, portal)?
    – can a postman establish connections (as he already does) between a office supplies distributor and small businesses?
    – can a delivery fleet that canvases every street in the country establish connections to Google street views? Or to DHS’s crime prevention programs?
    – can the unequaled visibility about the correspondence between parties help establish connections of a higher value (with due respect to privacy laws)?

    The affordance of paper, as a communication medium, is far from fading away in the digital age (what would you rather get: a glossy brochure about your next car or a digital video? If you said both, then how would you like if a DVD were delivered to you with the glossy brochure?).

    The fundamental ill is that, as long as USPS continues to be perceived (or continues to define itself) as a ‘delivery’ organization, and as long as its business model continues to be volume-based rather than value-based, then we will fail to extract the rich potential that is buried in this highly elaborate and rich organization.

    So, we need to forget about delivery. Instead, we should lift the hood of the organization to see how it can be disassembled and then re-assembled so as to fill voids and gaps in various market spaces.

    And this should not only apply to USPS, but to all its partners in today’s mailing industry.

  • http://www.prescottreport.com Charles Prescott

    There have been a number of very important threads begun here. I’d like to capture a few of them in a synopsis because they deserve to receive expanded attention and debate.
    • What business is the USPS in? “Connectivity?” “Delivery?” “Trusted agent?” “Alternate communications/competition mechanism?”
    • Should the USPS be returned to having the status of a “public utility” because of positive externalities?
    • Should all USPS services be offered everywhere? Should some localities be abandoned?
    • Should the Universal Service Obligation be abandoned?
    • Whatever the USPS is, if it is to be self-funding, how much “competition” will we permit it to wage with the private sector?

    I’d like to discuss the first one, because I think it underlies all the issues. As Pierre says,
    ” Can it still continue to be the great connector that it used to be? Well, it all falls in how we define connections.”

    So, what would Google do? As I understand it from our host’s book, Google’s intrinsic lesson is that we have to (1) Look at what we have, and what works. (2) Look at what the “business” really is. (3) Look at the data we have, and suspect we’ll have tomorrow, and (4) Construct a test plan to see what works going forward. And, do all that unbounded by mindsets, legacy assets, experiences, skill-sets, functions and missions. Were it not for one of the world’s largest labor unions, a democratically-elected representative body called Congress, and a 200-plus year history, it would all be so easy.

    The first step is reasonably easy to accomplish, although it is a changing scene, parallel to item 3. We have the only government agency with a physical presence in almost literally every inhabited corner of this continent. That’s phenomenal. Nearly everyone who will read this message and is located within the United States can walk, or drive perhaps no more than a couple of miles, to a branch of the Federal government. I suspect there may well be more post offices in the US than there are police stations. And you can look at that as a wasteful exercise in duplication, or as an enormous asset. I think it’s the latter, but it’s misused. Well, maybe that’s too strong. For sure it’s under-used.
    What do they do? They are nodes in a phenomenally efficient delivery system of paper and boxes, and information. Or at least in the last case, they could be. And it is, short of armored cars, the most trusted delivery network in the world. Diamond merchants in New York us the USPS to send stones worth hundreds of thousands of dollars to other merchants throughout the country. Millions of people rely on the USPS to bring them their medicines.
    And this logistics system and these nodes are an enormously under-utilized government resource.
    But it’s stuck delivering stuff, primarily machinable stuff, and stuff that could be delivered a lot of the way through “hybrid mail”.
    It should also be delivering bits and bytes and things that need security. Like money. Why can’t it once again be a financial repository for the millions of people in this country who are unbanked? Some 14 million households.
    The commercial system doesn’t want these people, folks who can’t save much, or buy homes and stock. They just need a safe place to keep cash. The USPS very quietly has a money transfer system, and it could be part of a global UPU system of financial services that would benefit the millions of immigrants here who support families elsewhere. There’s a need in a big crowd that could be served, not at great profit, but certainly a self-supporting one. If income amounts to a dime a week per customer and you have an estimated 14 million unbanked households half of whom open an account, that’s $72 million if only half of them open an account. Much more if, as is likely, each household has 2 or 3 account-holders. These are the “long-tail” of the financial business who need service. Google likes the long tail.

    And that incredible logistics system has lots of owned trucks, and leased capacity, which spends a lot of time on the road empty, being repositioned. Surely there are US government goods and materials that need “sending” that could be inserted into this system. Why should Commerce, or Agriculture, or Education or the Federal Court or any other government body not be required to make use of the postal service capacity if it has it? And why can’t the USPS use that space to compete commercially? Why should a truck travel empty when someone will probably pay to put something in it if you offer the space. Google would sell the space.

    And all the nodes, many of which are partially empty, are under-utilized assets. Why is the USG not required to do a capacity check in other government buildings before it builds yet another structure? Why can’t the USG partner with State offices? Why is the US Post Office in my hometown in Northern New York half empty and the State of New York has just built a new Motor Vehicle Department Bureau at enormous expense NEXT DOOR?
    I take it Google is about thinking of problems and pain points from a vantage point of “no currently vested interest”. So if the problem is space and buildings and housing government functions, why not combine them? And by “government” I mean “all governments”. And there, of course, is one of the rubs. I call it the Border Effect. The State and Federal and County and town and City governments, and their planners assume there is a border between them and will not even consider stepping across it to partner in completing their missions. It doesn’t even occur to them. But Google would. Google would “think without sight” of the borders. (Or at least it does sometimes. It’s returns on searches are often very, very conscious of geographic borders, and in a most unhelpful way, which I have often written about. Another story, another time.)
    And data, we need data and what it shows. There’s oodles of data, much of it showing that the USPS should give every house address an email address. It could then be the “trusted deliverer” of email messages. In fact, as things currently stand, the USPS may well miss out on the chance to be part of the Universal Postal Union’s dot Post TLD. This will be a totally secure on-line environment with carefully controlled and monitored access to domains within it. This could be the first spam-free/phishing-free/”trustable” on-line network. At least that is what the experiment is about.
    And I think that’s what Google would do. Unleash some thinking, draw up a plan, execute, look at the data. Keep it if it works. Don’t if it doesn’t. Can the elephant learn to tap dance? Probably, if the band would let it.

  • http://www.decisionanalysis.net Pierre Kacha

    Charles, thanks for the great synthesis of the many voices and opinions expressed on this blog.

    I am privileged to be ‘quoted’ by you! Based on the little reading I’ve done of your writings, you’ve impressed me as a great thinker… but this forum is not for kudos and admiration (not until we have accomplished something).

    I note one comment: “Post offices hey are nodes in a phenomenally efficient delivery system of paper and boxes, and information.” I would like to describe them as a ‘portal’ (I have tried to promote this concept in developing countries where the ‘culture of mail’ does not exist, and governments are constantly puzzled with what to do of their postal agencies – in such places, one can leapfrog the transition to a somewhat paperless society and foresee other uses for a ‘postal’ operator). As a ‘portal’ post offices can become a full fledged agent of the government, offering services AND KNOWHOW (i.e., not only transactional support, but expertise)… until that day when eGovernment is fully implemented. But we are not there yet…
    As for their role as providers of (some) financial services (could they become full-fledged commercial bankers, maybe through public-private partnerships? as in Ireland), I find the proposition to be consistent with the direction that many posts are taking (I am now writing from France where I reside for a year and La Poste has been developing a very comprehensive set of products, including mortgage loans). Nevertheless, with all due respect, I don’t think that it breaks the current business model. But it is definitely worth serious consideration because of the gap that USPS could fill, by serving the underbanked, the trust that is associated to their name, and the ubiquity/pervasiveness of their network (phyisical AND electronic – think of the POS One network, and of its potential)
    Regarding use of the logistics assets, I am not in favor of ‘requiring’ that government agencies use the excess trucking capacity. I guess, if the capacity is excessive it is an indication of poor planning… but, that is not to say that USPS should not leverage its transportation network and, point in case, they have started offering LTL (less than truckload) services between their BMC facilities – I thought that the conditions were not very customer-friendly (i.e, the shipper brings the goods to the BMC and the recipient must pick them up from the facility… it I am not mistaken), but it is a start.
    Personally, I think that USPS’s greatest transportation asset is their LLV and the fact that they hit so many addresses around the country. First, let’s turn them to electric vehicles (and create many jobs in the process… easier said than done, I know!). But, then, let us use them to provide a host of services (e.g., dropping off spare parts for appliances at private households, i.e., B-to-B-to-C transactions)… more thought required on this rubric
    But, as you say, the holy grail is data. I personally can’t begin to fathom what could be done of that data (of beneficial value of course), but the mere fact that every mailpiece in the mailstream is scanned, just shows what type of ‘connections’ can be established (for security enforcement, database marketing, redirection, preadvice, etc.) (note that the rub is in the ‘etc.’, I can’t find additional uses, but my instinct tell me there are tons). On that note ,I just read that the Finnish post will open/scan/email every mail piece, then remail it to their recipients… a pilot is being trialed.
    Time for action. Thanks John Callan for fathering this initiative, Jeff for promoting it on his blog, and all participants for expressing your views.

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