Private Post Offices

Ending the U.S. Postal Service’s monopoly on letter delivery is a cry that persists--gaining converts each time the price of a stamp goes up. But the specter of private competition meets stiff resistance from postal officials. They say private carriers would quickly abandon remote areas where the expense of delivering mail would mean little or no profit.

But the idea has had some high-level government support. The President’s Commission on Privatization even recommended that the government sell the Postal Service to save money. White House Budget Director James C. Miller III supports that idea.

Though it just implemented a big bulk mail rate hike, the Postal Service says it is a friend of the bulk mailer. “We go out of our way to help people,” a Postal Service spokeswoman in Washington said. To qualify for the Postal Service bulk mail rate, customers must register with the local post office and pay a permit fee of $60 a year.

Local post offices will provide detailed information so that customers can prepare mail to qualify for pre-sort discounts. Although the per-piece rate for bulk mail increased more than 33% in the latest round of Postal Service price hikes, the agency sought to soften the blow by increasing the so-called work-sharing discounts.

The basic per-piece rate for commercial bulk rate items (nonprofit mail is priced different) is 16.7 cents. If customers sort their own mail by the five digit Zip code designating individual postal stations, the discount is 3.5 cents per piece. If the customer further divides the pieces into individual mail carrier routes, there is a total deduction of 6.6 cents per piece. Before the April 3 rate hike, the maximum per piece discount was 4.2 cents.

Private companies have already taken a bite of the Postal Service’s territory. The Postal Services Board of Governors in 1986 granted legitimacy to the practice of privately shipping international mail to foreign post offices for distribution. The legality of the so-called international re-mail business--said be worth about $200 million a year in revenue--was disputed by the Postal Service’s staff and the battle isn’t over yet.

The American Postal Workers Union and the National Assn. of Letter Carriers have asked the federal court in Washington to overrule the Postal Service’s governors. The unions contend that the board caved into White House lobbying on behalf of the remailers despite the loss of hundreds of millions a year in revenue for the Postal Service.

The private remailers took advantage of a 1979 Postal Service rule that allowed the private delivery of “extremely urgent” overnight letters. That is the rule that allows companies like Federal Express Corp. to operate. But critics of international remailers say they don’t meet the legal tests required of the overnight businesses.

While the lawyers argue, the international re-mail business has been “growing extremely strongly,” said Yvonne Zweede, product manager for DHL Worldwide Services which jumped into the market last year with its WorldMail service. DHL will fly a minimum of five pounds per client of international mail to foreign post offices. The foreign postal services charge DHL a flat per-kilo rate to distribute the mail and DHL in turn bills clients every two weeks.