Is 5-Day Delivery USPS's Way of Saying It's Giving Up on Mail?
Will USPS let mail occasions fritter away?
Consumer packaged goods marketers—the sons and daughters of Messrs. Procter and Gamble—are arguably the most influential business philosophers of our time. Who doesn't have a brand that they must nurture these days? Athletes, musicians, sandwich makers, fitness instructors, and six-year-old beauty pageant contestants all tend brands like horticulturists pamper orchids. Everybody's down with the program—except, perhaps, the nation's most ubiquitous monopoly, the U.S. Postal Service.
Packaged goods marketers, whom I covered for a number of years, like to talk market share. When Coke or Pepsi gain a single point on each other, it's bonuses and promotions for the victorious brand teams. Designated by the U.S. government as the sole tender of the 150 million-odd mailboxes of America, the Postal Service has a 100% share of the mail market. It's not moved to excess of innovation owing to competition.
Packaged goods marketers like to talk exclusive brand assets and unique selling propositions. It's fitting that the acronym for the latter—USPs—is the same as that for the United States Postal Service, because its claim to mailboxes is one of the few business assets worthy of the definition of the word “unique.” It's the one and only organization allowed to open the lid of one's mailbox or cross the plane of one's mail slot. Try it yourself and you will soon be introduced to another unique USPS asset not found at FedEx or UPS: the Postal Inspection Service.
Packaged goods marketers like to talk usage occasions. Once CPG marketers have settled into a comfortable market share for a number of years, they seek to grow sales by increasing the numbers of “usage occasions” for their products. In the same sink, a consumer might use Ivory soap three times a day, but Liquid Plumr only twice a year. (Years ago an advertising association in New York threw a retirement bash for a legendary adwoman, who came up with the “Rinse and Repeat” instruction on shampoo bottles that skyrocketed usage occasions by mere suggestion.)
The Postal Service delivers to 150 million addresses six days a week, adding up to total usage occasions of 900 million a week, or nearly 50 billion a year. Now here's where the Postal Service runs it truck off the road in the estimation of CPG marketers. CPGers battle to increase occasions. USPS managers want to decrease theirs to the tune of nearly 6 billion a year by cutting out Saturday delivery. There are others who think this a crazy idea, most notably Postal Regulatory Commission Chairman Ruth Goldway and National Association of Letter Carriers Chief of Staff Jim Sauber. They both could get jobs at P&G or Coca-Cola since they would like to see USPS ramp up usage occasions by moving to 7-day mail delivery.
“Why would you want to reduce mail delivery while you're making a move to 7-day delivery of packages?” wondered Goldway, the most powerful regulator of the Postal Service. “Why not figure out a way to merge the two, so the mail continues to be a resource that helps to grow the network, stabilize it, maintain it, and, in fact, enhance it?”
Before any policies are changed at the Postal Service, labor must be heard from, and labor appears to be in line with the regulators. “We're moving to 7-day package delivery with Amazon. Why wouldn't we move to 7-day mail delivery and delivery at night?” Sauber asked, as did Goldway, at a meeting of postal stakeholders in DC last week.
Everyone knows that the Postal Service wants to cut a day from mail delivery to reduce labor costs and give a boost to its bottom line. But that, as Sauber pointed out, is a defeatist attitude in the world of free market business that USPS purports to be entering.
I suggest that the C-level staff at USPS ask themselves this: What if the government decided to privatize its post and put access to those 150 million doors up for sale? The winner of the resulting bidding war between UPS and FedEx, and perhaps even DeutschePost DHL, would certainly have to pay a hefty price for exclusive access to the doors of America. It would be hard to imagine them, when rationalizing the outlay, telling their boards and their banks that their first action after taking possession of those expensive doors would be to visit them less.