May 15, 2007

Postal Monopoly


From CNN: Size matters, so does shape under new postal rates.

The postal rate increase that kicks in Monday is shaping up to be a big headache for many businesses.

Many companies say they are confused and frustrated as they try to adjust to the new rules, and some say mailings could be severely curtailed due to higher postage costs.

The new regulations mean larger envelopes and packages will automatically cost more than smaller mail. Currently, postage is determined by weight, unless it's an especially large or odd-shaped package that warrants special handling.

If your solution come Monday is to stuff the same amount of material into a smaller envelope, the Postal Service could get you there, too: There are new thickness restrictions.

For first-class, letter envelopes, the allowed thickness is a quarter inch. If you go over a quarter inch, you run into more costly large envelope or parcel rates.

Postal Service spokesman Dave Partenheimer said the new rates take shape into account because it requires more effort to process a larger piece of mail.

"Before, thickness didn't matter," he said. Now, "thickness does come into play. If it gets too thick you create a new shape."

Cindy Golebiewski, an office manager in Wilmington, Delaware, said her company faces much higher postage costs under the new rules.

"The price is just doubling," she said.

If not for the new thickness limits, "we would be better off stuffing a 6-by-9-inch envelope than putting it into a big brown envelope," she said.

The Direct Marketing Association in New York is "very, very unhappy," said spokeswoman Stephanie Hendricks. "The rates go into effect on Monday under protest."

From Capitalism Magazine a few years back: Privatize the US Postal Service
by James L. Gattuso.

A second, perhaps even more important step would be to repeal USPS' statutory monopoly on letter mail. Few firms enjoy this sort of legal protection. Potential competitors can literally go to jail if they carry letters. Allowing such competition would be good for USPS as well as for consumers -- after all, postal service's insulated status fostered much of its famous inefficiency in the first place. The fundamental culture of the organization needs to change, and that would be fostered by more competition, not continued protection.

Posted by Forkum at May 15, 2007 03:11 PM