December 13, 2018
The government is looking to “sell” Americans’ last bastion of privacy—our mailboxes—posthaste.
Specifically, in seeking ways to boost revenue for the U.S. Postal Service‘s money-losing operations–the Trump Administration is suggesting selling access to mailboxes, according to a December 11 report by CBS News.
“The legal mailbox monopoly remains highly valuable,” said a government report issued last week. “As a means of generating more income, the mailbox monopoly could be monetized.”
While the report didn’t detail how much the USPS could earn from franchising mailboxes, it suggests that the USPS could charge third-party delivery services such as UPS or FedEx to gain access to consumer mailboxes, the network news outlet said. It’s currently illegal for other delivery services to drop packages or letters in a mailbox–a restriction that even applies to neighbors stuffing flyers for a local event.
The recommendation—a product of a task force created by President Donald Trump and chaired by Secretary of the Treasury Steven Mnuchin—is just one of the ideas that the group made to tweak the USPS business model. According to the report, as of the end of FY 2018, the USPS balance sheet “reflects $89 billion in liabilities against $27 billion in assets—a net deficiency of $69 billion between FY 2007 and FY 2018.”
Other proposals from the group included cutting costs and boosting prices for “nonessential services,” including delivery of commercial mail, such as advertising flyers, CBS News reported.
“As [mail service providers] and package delivery companies continue to expand offerings to multiple parts of the value chain, it is reasonable to expect a willingness to pay for access to USPS mailboxes,” the report noted. “By franchising the mailbox, the USPS could expand its revenue and income opportunities without necessitating any change to its current mail products.”
But the economics might not be as rosy as the Trump administration report suggests, Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank that focuses on productivity and innovation issues, told CBS News.
“Nobody knows what the economics of that are,” Atkinson said in an interview with the network news operation. “Right now, say what you want about the Postal Service, but the part that is perhaps the most efficient is the last-mile delivery,” or the delivery from postal offices to consumers’ homes.
Instead, it could actually backfire and end up costing the USPS more money, Atkinson warned: “One of the reasons the USPS is not even more financially troubled is because they have this monopoly for delivery” to your mailbox, he explained.
If the USPS sells access to consumers’ mailboxes, even more businesses may opt for rival services such as FedEx or UPS. It’s not clear whether the franchise fees would offset the loss of that mail revenue, he added.
“I’m dubious that they could charge a price that could be any better than they already make, because then they’d be delivering fewer of those letters or packages,” Atkinson said.
While the report didn’t single out Amazon, the online retailer , President Trump repeatedly has blamed the company for some of the USPS’ financial woes. The president has claimed the USPS loses $1.50 on average for each package it delivers for Amazon.
There’s little evidence to back up his claims, however, as the package delivery remains one of the few lines of business that’s growing for the USPS, CBS reports.
Research contact: @aimeepicchi