How Does USPS Stack Up to Other Posts?
When we sort through our mail, most of us don’t give much thought to the laws and regulations organizing the U.S. Postal Service. Throughout the world though, countries have established different postal models to balance access to postal services with financial sustainability. Some posts are focused on mail delivery; for others, mail is a very small part of their business. Some deliver six days a week; others deliver much less frequently. As mail volume declines across the world, countries are continuing to review and adjust their postal models.
The OIG just released a white paper that digs into the details. A Comparative Study of International Postal Models examines the differences between USPS’s postal model and 25 other posts across the world.
So, how does the Postal Service stack up?
- USPS delivers a lot of mail. The Postal Service is responsible for delivering nearly half the worldwide mail volume.
- USPS and three other posts are required to deliver six days a week. Most posts deliver five days a week, and some have moved to alternate-day delivery three times a week.
- USPS generally has more flexibility to balance service quality with financial sustainability. Except for six-day delivery, the Postal Service’s universal service obligation is largely defined in broad terms. USPS can also set its own targets for service performance. Many other posts have minimum service levels and targets set by law or the regulator.
- USPS uses a much smaller share of contract post offices. Nineteen other posts we reviewed had outsourced a greater share of post offices, and seven posts had outsourced 90 to 100 percent.
- USPS is government owned. The majority of other posts are as well, but eight posts are fully or partly privatized.
- USPS generates about 94 percent of its revenue from the delivery of mail including parcels. The remainder comes from other services such as P.O. Boxes and passports. About half of the posts we evaluated received two-thirds or more of their revenue from mail and parcels. The rest, including some of the more profitable posts, generate revenue from other businesses such as freight and logistics, banking, and insurance.
- USPS faces restrictions on business operations. The Postal Service has a limit on borrowing funds, constraints on managing its pension obligations, and strict limitations on diversifying outside its core business. Most other posts do not face these constraints.
Leave a Comment