Postal Service Reform

For more than 200 years, the U.S. Postal Service and its predecessors have enjoyed a statutorily imposed monopoly restricting the private delivery of letters. The monopoly was intended to enable the postal system to fulfill its mandate of providing uniform rates for at least one class of letter mail and delivery of letter mail to patrons in all areas, however remote. Some large mailers and private carriers want Congress and the Postal Service to allow greater competition for letter mail delivery. Others have raised concerns about how increased private delivery might affect the Postal Service's ability to sustain mail services traditionally provided by the government, especially since the Postal Service now receives virtually no federal money. This volume: (1) determines the historical and current basis for restricting private delivery of letters, including the Postal Service's efforts to enforce those restrictions; (2) documents changes in private sector letter delivery capacity since 1970; (3) analyzes the possible financial effects on the Postal Service's revenues, costs, and postal rates if restrictions on private letter delivery were to be changed; and (4) provides information on how recently reformed postal administrations abroad provide universal service and restrict private letter delivery. The second volume (GAO/GGD-96-129B) presents a detailed analysis of the restrictions in federal, civil, and criminal law on private letter delivery.

GAO found that: (1) the U.S. Postal Service (USPS) believes that private express statutes are necessary to protect its mail volume and revenue base; (2) it is difficult to enforce the statutes due to complaints from mailers and competitors; (3) USPS has not initiated any audits to determine mailer compliance since 1994; (4) USPS has issued regulations suspending the statutes to allow private firms to deliver urgent and international mail; (5) there is considerable debate as to whether USPS is the only organization capable of providing efficient and economical mail service; (6) USPS competitors account for more than 85 percent of all U.S. domestic expedited letter and parcel delivery revenues; (7) four USPS competitors could deliver USPS priority mail if given the opportunity; (8) private delivery firms are increasing their capacity to deliver USPS third-class mail by participating in national alliances that broaden their delivery networks; (9) several countries encourage private delivery firms to enter into agreements with postal administrations to increase mail delivery competition; and (10) USPS needs to determine how changes in private express statutes will affect universal mail service and postal rates.