Postal Service Rate Increase : Collapse Looming

How many people do you know that have stated "even if they, the postal service, double the rates, it would still be a bargain". Maybe those that have advocated this approach will have to take another look at where they stand. Collapse or total restructuring of the entire system is on it's way.

This is like the power generation industry, the more people save on electricity, the more they will have to pay as the facility stays the same size and the lines are still in place and so all the workers must stay to maintain the total infrastructure.

I believe there is a spot in the business of mail delivery for the postal service but it must be open to competition to find just where it is needed.

U.S. MAIL MONOPOLY WANTS RATE HIKE
Source: Tad DeHaven, "U.S. Mail Monopoly Wants Rate Hike," Cato Institute, July 6, 2010.

The long-term prospects for the U.S. Postal Service (USPS) monopoly are bleak, says Tad DeHaven, a budget analyst on federal and state budget issues for the Cato Institute.

To help stem the flow of red ink, the USPS intends to seek a rate increase. Only a government monopoly would try to raise prices when the demand for its services is plummeting. The rate increase will only push its already declining customer base to use cheaper, more efficient electronic alternatives, says DeHaven.

In contrast, countries around the world are continuing to liberalize their postal markets by embracing competition and private sector involvement. Britain is a good example:
In 1969, the British Post Office transformed from a government agency into a corporation, Royal Mail; however, the company's shares are owned by the government.
In 2006, Royal Mail's regulator removed its monopoly and opened British mail delivery to full competition, which the postal unions opposed.

According to the Daily Mail: The British government is now prepared to take the next step -- privatization. In doing so, the government is considering transferring a portion of Royal Mail's shares to its employees. Giving the employees ownership stakes would inhibit the unions' ability to extract concessions that would negatively affect the company's bottom line.

Like their counterparts in the United States, the British postal unions are a hindrance to effective and efficient postal management. With e-mail and other technologies undermining traditional mail, neutering the inflexibility caused by unions is paramount for mail operations here and abroad, says DeHaven.