Wednesday, July 20, 2011

Non-Headline: "Postmaster Says Days Are Numbered"

Try putting those qualifications out there today!
USA Today is reporting that due to "falling mail volume and rising red ink" the days of Saturday mail delivery are numbered.  The steady decline of the U.S. Postal Service is emblematic of the sclerotic thinking that surrounds Washington D.C.  It's a business model that is doomed to failure - anyone in the private sector could have told you that years ago.

First came FEDEX and UPS.  The story of the former is legend and only partly true: Fred Smith, a former US Marine, submits a paper in graduate school at Yale where he earns a "C."  The paper purportedly is the outline of what became the FEDEX system.  (The true story, according to Fred himself, is that the paper was written as an undergrad and was a reflection on the effects of automation.)  Point is, he built a system that people trusted.  If you wanted to make sure your package was delivered on time and in one piece - you used FEDEX.  Sure, you payed more for it, but it was worth it!

This was the first nail in the coffin of the USPS.  Then came the fax machine.  Businesses could now almost instantaneously exchange critical information without worry and only nominal cost.  Finally, the ultimate - the internet and e-mail.  In typical government fashion, what did the US Postal Service do in each of these instances?  They raised the cost of doing business with higher fees.  Oh, and the service got worse - remember when your front door had a funny little slot and mail was dropped through once a day, except Sunday?  They made us install streetside mailboxes to increase efficiency and our mailmen gained weight and lost connection with the customer.   By the way,  did I mention their labor force is unionized?  Admittedly, after 1982, the USPS is no longer subsidized by the U.S. taxpayer and they love to tout that they "are not a government agency."  But, they sure behave like one!

As internet banking and other services continue to improve and as marketing forces switch increasingly to the web, it is inevitable that the USPS will continue to dwindle.  My proposed solution?  A fee for service business model with several tiers.  First, you could have a secure scan and e-mail delivery system for a set price, eliminating the need for paper delivery period.  Second, if you want to touch the mail you would have tiers of delivery at different costs - you want your mail every day instead of once a week - it will cost you.  Finally, if you want the true personal service of mail delivered to your door - that would also be an additional cost.  It's sort of a "paygo" model, but one that might save the USPS.  Of course, in the short term you would have the problem of all those unionized postal workers that you can't fire that will be paid to do nothing...but once those contracts age out the business could be profitable.

I don't know if what I propose is the right solution.  But, this is the kind of thinking that has to be applied to EVERY government agency from HHS to Defense to Energy...all of them.  Ask the question - how have times and technology changed since we were founded and how can we adapt our businesses to exploit those changes?  Ultimately, it would save the American people a lot of cash and heartache.

I'm out of here.

Rumble on!

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