David R. Henderson  

Mail Delivery: Drop Saturday or?

Home Prices During the Great D... The Uneasy Case for Progressiv...

. . . Wednesday. I gave a talk at Hoover Institution's retreat yesterday and in the Q&A, someone suggested cutting government spending by cutting Saturday mail delivery. After my talk ended, a woman came up and said that she thought cutting Saturday delivery was a bad idea. At first I thought she was objecting the way most people object to cuts--just not wanting them but not having another suggestion. But she had thought it through. Here's what she said:

"If they drop Saturday delivery, then people will go two days without mail delivery. That can be especially hard for some businesses. Then, when you consider how many Monday holidays there are, people would sometimes go without delivery for three days. Instead, they should cut delivery on Wednesdays."

Brilliant. The woman, who gave me permission to name her, is Helen Harmon.

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CATEGORIES: Business Economics

COMMENTS (19 to date)
phil writes:

Since the post office is one of the few functions of government actually enumerated in the Constitution, I suggest closing the education department, the DEA, or any of a few hundred other government functions first.

Medwards writes:

The USPS is fully self-funded. Dropping a delivery day wouldn't help the federal government's spending habit.

Babinich writes:

I though Tuesday was the lowest volume day?

Anyway that's a short term action. What's needed is a USPS killer app.

mdc writes:

Isnt this like the USSR trying to 'save money' by having the state steel company take Wednesdays off or something? Maybe the operation as it is is loss-making, but the issue is the government blocking the market mechanism by having a nationalised industry in the first place. The inconvenience caused to people who want post (or steel) and are willing to pay the market price for it is a dead weight cost, compared to just privatising the damn thing.

SB7 writes:

I've heard Tuesday or Wednesday as the lowest volume days, but those are never on the table for cuts. AFAICT this is to keep their union happy, and for the same reason parks departments always responds to cuts by threatening to close the most visited parks and monuments rather than the least: it scares the public into opposing cuts.

And Medwards, the USPS is fully self-funded in theory only. They've been burning through "emergency" funding out of the general revenue for years on end now.

Rob Matthews writes:

Canada has not had Saturday mail delivery for several decades now and it has a stronger economy than the USA.

Grant Gould writes:

Typically union contracts want higher effective pay for weekend hours than for weekday hours, meaning that cutting weekend hours yields greater cost savings. I don't know if this is the case with the USPS, but it might well be that existing contract provisions make Saturday a more appealing day to cut.

Blackadder writes:

The Postal Service has already proposed stopping Saturday delivery.

My counter-proposal would be for USPS to stop delivering on Saturday *and* on Wednesday. Also on Monday, Tuesday, Thursday, and Friday.

Ben Hughes writes:

I think Grant hits the nail on the head: cutting a day on the weekend is likely to be more cost-advantageous.

There's also a demand-side consideration: I'd fathom that people on net get less value in receiving mail on Saturday than on *any* weekday simply because most businesses operate Monday - Friday. I'm almost certain this outweighs any potential continuity cost of having many 3-day gaps without mail.

Marc A Cohen writes:

Do people really use the mail all that much any more? I am not young (I am 41), and I started doing everything of any real importance on-line years ago. I never even bothered to order checks for my current "checking" account when I opened it 5 years ago. All I ever get in the mail anymore is junk mail addressed to "current resident". I don't see why they can't cut residential mail delivery down to just one day per week.

Noah Yetter writes:

@Blackadder has the right idea.

But at any rate, Wednesday would be better than Saturday. Sometimes I choose USPS delivery over UPS Ground just for the Saturday delivery. FedEx Ground also delivers on Saturday but not Monday.

I don't much care about mail delivery per se but in parcel delivery, Saturday is a competitive advantage.

Timothy Taylor writes:

Dropping one day of mail delivery seems like a mild alternative.

How about having delivery 2 days a week when all mail would be delivered at the current price. Some households get Monday and Thursday; some get Tuesday and Friday. If you want Saturday delivery, you could get it for an extra fee. All the catalogs and junk mail and magazines and most of the letters could arrive on those 2 days. The cost saving here is that the number of people delivering the mail could drop by half or more.

Seth writes:

You still get mail? Mine is mostly ads. Perhaps subsidized mail delivery is really what is putting newspapers out of business.

Lord writes:

Every other day would be plenty.

Kevin L writes:

Maybe the USPS could make up some revenue by charging for ad-blocking. Then they would get the money from the ad mailers for delivering and from the recipients for *not* delivering.

Yancey Ward writes:

Her idea, and her thinking, seems sound, and, if so, Saturday is the day they will cut.

BZ writes:

Kenvin L is brilliant. As crazy as that idea sounds, I would pay for it in a New York minute, as would a lot of people I believe.

Everytime I grab my daily handful of crap for the circular file, I think of how many more choices we'd have if low-end postal delivery wasn't a monopoly.

phil writes:

The post office makes most of its money on bulk mail, not first class mail, so that flyer and magazine are what keeps the USPS going, not the personal thank you note from your Mom. It has always been that way: the early post office was primarily serving the newspaper industry, not letter writing. Letter writing did not become en vogue until the creation of the postage stamp in the mid 19th century which brought "pay by the seller" instead of "pay by the recipient." The brilliance of that move, coupled with the bold step of reducing rates 90% (10c to 1c), resulted in a huge increase in volume.

Throughout history there has always been competition to the government-supported postal system. The urban "Penny Posts" did a robust business. Wells-Fargo successfully competed. Today we have UPS and Fed Ex. They fill niches in the market. But what none of them do is guarantee that every address in the country could expect daily mail service. A nationalized postal system also enables the Universal Postal Union -- the agreement between countries that only the sender pays postage (ever wonder why the letter you send to Germany does not require a German stamp even though they bear a cost?) That sort of guarantee, I believe, is sound public policy and worth a few bucks of taxpayer support.

FYI, I'm a stamp collector, do a ton of business through the mail, think they provide a superb service and I know for a fact that no private company will take my letter across the country to any address I specify for only 44 cents. It's a bargain!

Jeremy, Alabama writes:

If the USPS were private, they would already offer being able to download envelope scans of letters in your po box, including potentially discarding or never even receiving junk mail you dont care about. You would need to stop by your po box only when there was something important, and home delivery would gradually shrivel up, as it should.

The USPS cannot contemplate anything radical like this. They are first-and-foremost a union shop that sells a service monopoly.

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