E-business shortchanges USPS
- By William Matthews
- Sep 21, 2000
"U.S. Postal Service: Postal Activities and Laws Related to Electronic Commerce"
The problem is, the check isn't in the mail.
Businesses and the federal government are relying increasingly on electronic
transactions, and it's devastating the U.S. Postal Service.
This year the mail carrier expects to lose $300 million. More than half
of that — about $180 million in lost revenue — is due to a half-billion
checks the federal government has decided to deliver electronically rather
than through the mail.
The government isn't the only postal customer cutting back. Banks reduced
their mail volume by 18 percent between 1996 and 1999, according to the
American Bankers Association, and businesses from utilities to phone companies
are encouraging their customers to pay their bills online.
It's probably going to get worse. The Postal Service is predicting "substantial
declines" in the volume of first-class mail over the next decade. According
to the General Accounting Office, the anticipated revenue losses could make
it difficult for the mail service to perform its primary function of providing
the nation with universal postal service at reasonable rates.
But the switch to electronic transfers has its positives as well as
"Online sales are expected to grow substantially over the next few years,
which would entail a dramatic rise in parcel shipments and returns," GAO
auditors reported. Unfortunately for the Postal Service, parcel post is
a sector of the business with a lot of competition.
Not only would the Postal Service face its traditional rivals, FedEx
and UPS, but it is also likely to face new companies offering such services
as same-day delivery. That's already happening with some online purchases,
such as groceries, CDs, videos and books, the GAO reports.
However, there other ways the Postal Service could profit from the online
revolution. USPS already is offering a number of electronic services, including
electronic bill paying. And it is considering others, including guaranteed
delivery of electronic documents; the sale of phone cards and other merchandise
over the Internet; and a money-by-wire service to Mexico.
"The Internet offers unparalleled opportunities" for the Postal Service
to expand its revenue base, the GAO said. But there remain unanswered questions
about which areas the Postal Service can enter.