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 #227  

 December 1998




The Internet: Changing our Postal Service and our Holiday Traditions

by Amy Ridenour


This year, Americans will send 2.8 billion Christmas and Hanukkah cards.1

What these Americans don't know, however, is that sending a greeting card - and other messages once entrusted to the post office - may shortly become an entirely different experience.

One reason is the Internet, where sending "virtual" greeting cards and "virtual" flowers is catching on. Although receiving virtual flowers is not exactly a sensory experience, virtual greeting cards have great potential. Internet speeds will soon be hundreds of times faster (the recently-announced merger of AT&T and the cable company TCI, for example, will soon give families faster Internet access via TV cable2), permitting people to include home videos of important family events - births, graduations, weddings - within Internet greeting cards.

Technology is changing how we communicate, and forever changing the U.S. Postal Service.

E-mail is an obvious threat to traditional mail. Even Postmaster General William Henderson, speaking at a December symposium on the future of the Postal Service sponsored by the Cato Institute, a Washington, D.C. think-tank, admits: "I probably e-mail as much as any person in America."3

But the Internet won't end the need for organizations like the government-run Postal Service or the privately-owned FedEx and United Parcel Service. In fact, the Internet is making package delivery services more important. A Harris poll found that 43% of Americans expected to do some holiday shopping online this year,4 and all those online purchases must be delivered. The National Retail Federation says that 26% of all U.S. retailers have a web site, up from 20% in 1997 and 8% in 1996.5 The Gap clothing store's web site generates more sales volume than any of its stores, except one.6 The Barnes and Noble online bookstore's traffic quadrupled between early summer 1998 and December 1998; similarly, traffic on the Amazon.com online bookstore's site the day after Thanksgiving, 1998, was four times what it was on the same day in 1997.7 By 2005, Internet commerce is expected to reach up to 6% of U.S. GDP.8

The importance of package delivery to the post office would have surprised Benjamin Franklin and other early postmasters, for whom the post office existed to send only letters, government and military dispatches and packets, which were bundles of letters, multi-page letters, and other printed materials typically weighing less than 3 pounds in total. In those days, the postal service was different in other ways as well. There were no envelopes - letters, which were sometimes written on just a small scrap of paper, were simply folded and sealed with wax. Postage was paid not by the sender, but by the recipient.9 And, until the Postal Act of 1863, the U.S. mail was considered to be mail between cities, not within cities, although delivery within one's own city was possible, provided one used the services of a private independent contractor who worked in conjunction with the postal service and charged two cents extra.10

Will the postal service of the future forgo letters entirely, and be nothing more than a government-owned parcel delivery service? Probably not, but expect letters themselves, the way the post office works internally and the means of affixing postage to change.

People use e-mail today because it is easy and efficient. But some of the same new technology that made e-mail possible is also making traditional mail easier and faster to produce. For instance, Pitney-Bowes, the Stamford, Connecticut-based manufacturer of postage meters and other office equipment, has received post office approval to beta test "Click Stamp" - new technology that lets the 16% of letters that are generated by personal computer11 have the postage affixed through the PC itself, literally as the envelope is bring printed. And, although the Post Office has announced a price increase to go into affect January 10, 1999, Postmaster General Henderson says that technology helps keep postal service labor costs down. He says, "We're probably in the top 10 users of technology in America," and estimates that - without the benefits of new technology - the Postal Service would need 100,000 more employees.12

Another factor that will help keep traditional mail alive in some form is "message overload." Because of e-mail, voice mail, cellular phones and faxes, people today receive a far greater volume of messages than many can handle. A study conducted by the Menlo Park, California-based Institute for the Future found that working Americans today are sending and receiving an average of 190 messages a day, up from 178 in 1997 and substantially more than several years ago.13 A 1998 Gallup poll found that e-mail is the second most popular form of message transmittal (after telephone),14 but it is worth remembering that e-mail has its disadvantages (too much unsolicited e-mail for one, and frequently changing e-mail addresses, for another).

But the greatest disadvantage to e-mail is credibility. A study by the non-profit Virginia-based PaperCom Alliance, a group of companies and associations in the paper, mailing, software, printing, publishing and transportation industries, found that - in this era of high-tech communications - paper mail has retained credibility and impact far more than many experts would have predicted.

Says Michael J. Critelli, CEO of Pitney Bowes: "[Physical mail] is valued by recipients because of its universal accessibility, its versatility in terms of the media that can be used to deliver the message, the portability of its output for a recipient and the perception that the recipient has more control over the timing of response. It is also trusted, because the recipient has more visual information about the sender, not the least of which is the sender's identifiable physical address and the sender's choice of physical material and content. Moreover, recipients often believe that if a sender has to incur significant costs to prepare a mail piece, that gives the sender more credibility and substantiality. Indeed, one of the attractive elements of a postage meter has been the professional appearance it gives an envelope."15

It ironic that one of the elements that makes e-mail popular - the fact that sending an individual e-mail is usually "free" to the sender - is also an important benefit to its chief competitor, traditional mail.

Another change to watch for is the Postal Service's ability to track the location of letters and packages. "There should be no tolerance for not knowing when mail, once tendered, will be delivered," says postal expert Gene Del Polito, president of the Advertising Mail Marketing Association.16 As more and more Americans use the Internet to shop and grow used to the ability offered by UPS and FedEx and some online retail stores that use these and other private parcel delivery services to know exactly where their packages are with just a couple of clicks, they'll come to expect this service from the Post Office as well. And if the Post Office can't deliver it, as it hasn't so far, expect public pressure for postal privatization to increase. If this happens, there will be the greatest change of all: the ability of Americans to choose, for the first time in our history, between competing private postal services to determine which letter-delivery service offers them the best value for the best price.

 




Footnotes:

 

1 "CGA Industry Fact Sheet," Greeting Card Association of America web site, downloaded December 11, 1998, http://www.greetingcard.org/gca/facts.htm.

2 John Zeglis, President, AT&T, Remarks to the Edison Electric Institute, Chicago, Illinois, June 1, 1998.

3 William Henderson, Postmaster General of the United States, Speech at "Mail @ the Millennium," a Cato Institute conference, Washington, D.C., December 2, 1998.

4 James P. Lucier, Jr., "Danger in Cyberspace: Will Traditional Postal Monopolies Usurp E-Commerce Functions?," Speech at "Mail @ the Millennium," a Cato Institute conference, Washington, D.C., December 2, 1998.

5 Holstein, Susan Gregory Thomas and Fred Vogelstein, "Click 'Til You Drop," U.S. News and World Report, December 7, 1998, p. 45.

6 Holstein, p. 44.

7 Mark Liebovich and Leslie Walker, "Shift to Online Shopping Surpasses Expectations," Washington Post, December 17, 1998, p. B1.

8 Lucier, December 2, 1998.

9 James I. Campbell, Jr., "The Postal Monopoly Law: A Historical Perspective," The Last Monopoly: Privatizing the Postal Service for the Information Age, edited by Edward L. Hudgins, Cato Institute, Washington, D.C., 1996, pp. 10-11.

10 Campbell, p. 14.

11 "Pitney Bowes Receives U.S. Postal Service Approval To Test New PC Postage Product," press release, Pitney Bowes Inc., November 10, 1998.

12 Henderson, December 2, 1998.

13 Michael J. Critelli, Chairman and CEO, Pitney Bowes Inc., "The Future of Messaging," Speech at "Mail @ the Millennium," a Cato Institute conference, Washington, D.C., December 2, 1998.

14 "Will E-Mail Replace the Postal System?" press release, PaperCom Alliance, downloaded December 17, 1998 from http://papercom.org/press2.htm.

15 Critelli, December 2, 1998.

16 Gene A. Del Polito, Ph.D., President, Advertising Mail Marketing Association, "The Postal Service and Postal Legislative Reform: A Mailer's Perspective," Speech at "Mail @ the Millennium," a Cato Institute conference, Washington, D.C., December 2, 1998.

 


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Amy Ridenour is president of The National Center for Public Policy Research. Comments may be sent to [email protected]




The National Center for Public Policy Research
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