Last month, the US Postal Service quietly posted a “request for information” on a government website asking for help in designing a more efficient package delivery system. Its chief competitors, UPS and FedEx, have been using a system called “dynamic routing” for years, and the Post Office, apparently, would like help in understanding how it works.
According to Reuters, the Post Office now sees an opportunity in the growth of e-commerce and the huge growth in shipping to deliver on-line orders.
“There’s an upside and a downside to the Internet,” USPS spokeswoman Sue Brennan told Reuters. “It has decreased our first class mail, but what it’s done is that people are shopping online and they need someone to deliver these packages.”
This is an astute observation, for the 1990s. Coming, as it does, in 2013 is about a decade-and-a-half too late. Is it any wonder that the Post Office lost $16 Billion last year? The growth of e-commerce has been the most obvious business trend since Clinton was President.
Reuters reports that the Post Office currently lacks the know-how or software to allow its drivers to find individual addresses and calculate the most efficient routes to deliver packages.
As spokeswoman Brennan asks, “Someone could just be delivering packages and it wouldn’t be every house in a neighborhood – so what’s the best way to get to all the addresses in a specific geographic area or ZIP Code?”
Do we need any more evidence that the private sector can deliver product and services more efficiently than the government. All monopolies have an instinctive bias towards their existing practices. The difference, however, is that in the private sector competitive pressures will destroy a company that doesn’t innovate. Government monopolies, on the other hand, can be protected from these pressures for quite a long time. This protection, of course, comes at the expense of consumers.
Its current death spiral seems to have finally awakened the Post Office to changes in the marketplace. Unfortunately for them, though, the realization is about 10 years too late.