Costs of a mail hike

A year from now, if stamps cost 23 cents instead of 20 cents, the US Postal Service will be making more money. But in the long run, it might wish it hadn't sought such a big jump in the cost of mailing a first-class letter.

The increase seems likely to accelerate today's move toward electronic mail, sometimes called the delivery system of the future. It is expected ultimately to replace much of today's hand-delivered first-class mail, including communications between businesses and bill paying by individual Americans. Firms that mail in large quantities have the most incentive to move toward electronic mail.

The entire postal system would be weakened if significant numbers of users were to shift to electronic mail or - for second-, third-, and fourth-class mail - to alternative carriers.

Lest the Postal Service be tempted to take the threat of electronic competition lightly, it need only recall what has happened with packages. A few years ago nearly all packages were sent via its parcel post service; but United Parcel Service then began to offer faster and cheaper service. As a result, most packages now are sent UPS.

Technically the increase is just a request by the Postal Service that would take effect Oct. 1, 1984, and which needs approval by the Postal Rate Commission. But when a similar request was made three years ago and the commission agreed only to part of the boost, the Postal Service overruled that decision and put the full hike into effect anyway. Thus the expectation is that the three-cent boost will take effect; there also will be higher costs for mailing post cards and other classes of mail.

The Postal Service says it needs the increases because, after two years of profit, it again is losing money. It is the first increase in three years.

Productivity of postal employees has taken a much-needed leap upward in the last half-dozen years or so. Yet some critics believe more economies can be made in this area, in part through continued introduction of automated equipment, such as letter sorters. Some also argue that postal-employee salaries remain significantly higher than those of workers in private industry who do comparable jobs; they ask whether economies could be made through trimming the number of jobs and raising productivity further.

The Postal Rate Commission should look carefully at the rate request. It should make certain that the Postal Service justifies its current need and understands that an increase could accelerate the move away from paper mail and toward the electronic communications of competitors.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK