Magazine article Management Review

Pushing the Envelope

Magazine article Management Review

Pushing the Envelope

Article excerpt

With the surge in overnight-delivery competition and the arrival of cyber-mail, it's tough to say who will be the 21st century's letter carrier.

When Xerox Corp. wanted to promote its new product, The Document Source, to prospective customers in Germany, it used the U.S. Postal Service. It entered a single copy of a promotional mailing into a computer in Anaheim, Calif. Seconds later, it emerged at a Global ePost printer in Germany. Within hours, the mailing was being delivered by the German Post Office across Germany. A mailbox in cyberspace--a vision of the future, courtesy of the U.S. Postal Service.

A vision of a nightmare for folks like Federal Express, United Parcel Service and Mail Boxes etc., just to name a few. They're the Postal Service's competitors. And they don't like this vision one bit.

That's the nature of a debate heating up in Washington--how should the post office of the 21st century look? How far should its mandate stretch? How does one create a level playing field on the eve of a cyberspace future?

The last time such a debate was joined, more than a quarter-century ago, the Post Office Department became the quasi-independent U.S. Postal Service--as close to a private corporation controlled by the government as any government agency. The goal? Universal delivery of mail in the United States at no cost to taxpayers.

The problem is that since 1970 the entire landscape, indeed the very definition, of mail delivery has changed dramatically along with the expectations of every post office customer from the most isolated rural farmer to the CEO of a Fortune 50 corporation.

"Federal Express and United Parcel Service have changed people's expectations of immediacy and convenience," says Robert Reisner, the vice president of strategic planning for the U.S. Postal Service, "but the expectations are being changed by a $7 or $12 or $18 product, and that isn't a 32-cent product."

Indeed, what today's post office is most proud of is its on-time record for its core mandate, the first-class letter. "Price Waterhouse reports that 91 percent of local first-class mail is now being delivered overnight nationwide," Postmaster General Marvin Runyon testified before the Senate last fall. Moreover, Reisner points out that the post office "delivers more pieces of mail in a week than they [private overnight carriers] deliver in a year."

To be precise, last year the post office delivered 603 million pieces of mail each day to 128 million addresses--that's more than 182 billion pieces during 1996. FedEx, as the largest private postal carrier, is no small potatoes, but it can only report delivering 2.7 million pieces of mail each business day. For an international perspective, the increase alone in the post office's volume over the past decade--28.7 billion pieces of mail--is larger than the annual volume in Japan, France or Great Britain.

But the Postal Service has more than it boasts about. It hasn't had a taxpayer subsidy for 15 years. Indeed, for the past two years, it has run at a profit of more than $1 billion annually. And it is using this vast stream of revenue to modernize, streamline and update the mail service so it can hold the line on first-class postage and continue to meet its performance goals into the next century.

The Dark Side of the Post Office

So why is Congress, and particularly Representative John McHugh (R-N.Y.), the powerful chairman of the Subcommittee on the Postal Service for the House Government Reform and Oversight Committee, pressing the Postal Reform Act of 1997 so vigorously? Quite simply because there are many opponents of the USPS who believe there is a dark side to the post office.

"The post office is not working on service at a reasonable price," explains David Schonfeld, vice president of marketing for Federal Express. "What it's done instead is to look for adjacent businesses to get into because it's easier to get into someone else's business than streamlining its own. …

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