Postal Service Doesn’t Deserve Monopoly

Fed up with the U.S. postal system’s high prices and poor service, many businesses have been transporting foreign-bound letters overseas and then mailing them. Alas, it turns out that this practice is illegal.

At first the Postal Service threatened lawsuits to protect its monopoly. But now its board of governors has decided to change its regulations to legalize international remail services.

Board Chairman John McKean explained that the Postal Service wants to “preserve the benefits of desirable competition.” Though Congress entrusted the service with a monopoly, he said, that “monopoly was not intended to protect us from having to face up to our own shortcomings.”

The remail issue is relatively minor. If the Postal Service truly wants to preserve competition in the interest of consumers, it should suspend enforcement of the Private Express Statutes, which bar private firms from carrying first-class mail. Better yet, this monopoly should be repealed by Congress.

Take the case of Harold O’Brien, the owner of House & Senate Delivery Service. Even as the Postal Service prepares to allow overseas remailing, it is trying to shut down O’Brien’s firm, which delivers messages to members of Congress for as little as 5 cents an ounce. Handling mail twice as fast at one-fourth the cost has gained favor with lobbyists and others who want to communicate quickly with lawmakers.

The firm was launched nearly four years ago, but until last November the Postal Service contented itself with writing O’Brien threatening letters. Then the service filed suit in federal court and warned firms using H & S that they could be fined and required to reimburse the Postal Service for lost postage.

O’Brien, who taunted the Post Office to sue him, remains unrepentant: “I intend to go on until they throw me in jail.” He doesn’t think that a jury will convict him; after all, he says, “everybody has horror stories about the post office.”

Capital Legal Foundation, a free-market public-interest firm, is representing O’Brien. But his legal defense is a shaky one. Today the only exception to the Postal Service’s first-class monopoly is extremely urgent mail, normally costing at least $3 a letter. In recent years the Postal Service has shut down private posts in Kansas and New York, while congressional proposals to decriminalize private mail delivery--the latest introduced by Rep. Philip M. Crane (R-Ill.)--have gone nowhere.

There is no excuse for continuing the federal postal monopoly. Mail delivery is 10% slower than in 1969, yet stamp prices have risen 50% over the last five years alone and may soon be upped again.

At the same time, there is no doubt that private firms could do a better job delivering the mail. U.S. government agencies already routinely turn to United Parcel Service to send out packages; over Christmas the Postal Service paid Federal Express to carry first-class mail over specific routes. Rural mail delivery is now contracted out to 4,800 private carriers, at a saving of up to two-thirds. And 50 billion pieces of regular mail a year are pre-sorted by private firms before they are mailed.

The only serious argument against allowing competition with the Postal Service is that private firms would “skim the cream,” leaving the quasi-governmental body with the expensive, difficult routes. But UPS delivers to the continental 48 states at a standard rate; moreover, rural deliveries account for but 4% of the Postal Service’s revenue. Anyway, why should urban dwellers, who pay more for everything from housing to food, have to subsidize rural residents?

The real “cream-skimmers” are Postal Service management and employees--”the highest paid semi-skilled workers in the world,” observes John Crutcher, a postal rate commissioner--who use the monopoly to protect their artificially high wages. They, not the public, are the beneficiaries of the Private Express Statutes.

John McKean deserves much praise for admitting that his agency is not serving consumers well. But while he’s right that blocking competition from remail services does not “enhance the welfare of our customers and the nation,” neither does suppressing competition elsewhere. It’s time the government stopped suing people for providing better service for less.