Why a Postal Monopoly is a Bad Idea
The U.S. Postal Service raised it's rates for first-class mail today. No longer will you be able to buy a $0.39 stamp. The day of the $0.41 stamp is upon us. The rate hike is annoying, but ultimately not all that relevant to my life. Aside from thank-you notes and renewing license plates, I don't really use the Postal Service.
However, the USPS isn't just raising rates on first-class mail. The Postal Regulatory Comission also decided to change the way it calculates rates for periodicals and magizines:
Starting in July, postal rates for some publications will rise by as much as 30 percent, and a growing number of critics say the new rates will saddle small, independent publishers with inflated costs and betray protections granted by the founding fathers to the press.
The U.S. Postal Service gave periodicals a special class of mail more than 200 years ago and averaged rates to make it cheaper to send a magazine than a letter, while still giving publishers first-class service.
The cost to the Postal Service of sending periodicals has also risen disproportionately to other types of mail over the past 10 years.
Very basically, here's how the changes in rates are calculated: The average cost increase to periodicals is 11.7 percent, but this rate skews lower or higher for many based on price-based incentives created to push publishers to streamline their mailing operation.
A 758-page document details the plan, which plugs many variables into a pricing equation: packaging, co-mailing, co-palletting, pounds, pieces, shape, sacks, drop-shipping, points of entry, distance traveled and editorial weight versus advertising weight.
Confused? So are many publishers. It doesn't help, they say, that the computer software created to help them solve this equation won't be available until mid-June.
Both sides agree that the issue is, at its core, an ideological debate between those who believe periodical postal rates should be averaged for all to protect the democratic dissemination of information and those who see averaging as a subsidization that hinders efficiency.
It's also a fairly pointless debate. The only reason it's happening at all is that periodicals have exactly one choice for delivery: the USPS. There is no competition for first-class mail delivery. By law, anyone who tries to compete with the USPS in first-class mail delivery commits a crime. Publishers are forced to use the government monopoly, instead of using whichever company gives them the best combination of price and service.
It's time to end these pointless, stupid debates over the best way to calculate postal rates. Allow Fed-Ex, UPS, DHL, and other carriers to compete with the USPS. Let publishers choose their own mail carrier. Some carriers might have rates that are less expensive than current Postal Service rates. Other carriers might have rates that are more expensive than current Postal Service rates. Regardless, they would be rates that publishers choose to pay, based on their unique needs. Everyone would get the best combination of price, speed, and service that they need.
Right now everyone gets the same combination of price, speed, and service -- whatever the Postal Regulatory Comission decides is best for the nation.