Why does the U.S. Postal Service charge the same price for a greeting card going from Washington, D.C., to California as it does from Manhattan to Queens? Because the Postal Service must follow a set of regulations designed to ensure that everyone can send and receive mail at a reasonable price. Those regulations are called the “universal service obligation,” or USO. And it covers many aspects of mail delivery.
What’s interesting about the USO is that while parts of it are clearly defined, such as the requirement to deliver six days a week, other aspects are more general and open to interpretation. For example, what does “quality service” actually mean?
For over a decade there’s been a discussion about the need to more clearly define the Postal Service’s USO. As mail volumes decline, more specific rules will help ensure an adequate level of service for everyone. In addition, perhaps as more and more people move toward digital alternatives, some rules could be relaxed.
In our recent white paper, Reevaluating the Universal Service Obligation, we looked at eight other countries where the posts have made recent changes to their respective USOs (this research was done prior to the COVID-19 pandemic). The most common changes were decreasing the number of days in delivery and slowing the delivery time. In addition, we found that in those countries, USO changes were needed to lower the cost of delivering mail, even though all eight countries earn some revenue from non-postal products, and unlike the USPS, half receive some sort of subsidy from their governments.
What do you think? What changes to current postal services would be acceptable to you? Are there non-postal products or services USPS should be allowed to offer to generate additional revenue?