UPS CEO Scott Davis was asked about the future of the US Postal Service yesterday in an interview for the Oregonian. Davis suggested that “Clearly, there’s a role for the post office”, and noted that “the post office is a competitor of ours and a customer of ours and we have a pretty good relationship”.
Davis also said that the USPS needs to “reduce services, reduce post offices”, to become “fiscally sound”.
Davis pointed to the USPS’s uniform pricing for letters and flats as the agency’s “big political challenge”: “For us to deliver every package around the world at the same price, it just wouldn’t work.”
What’s odd about Davis’s comment is that the USPS doesn’t “deliver every package around the world at the same price” any more than UPS does- priority and parcel post rates are based on distance, the same as UPS and FedEx. It’s only first class and standard letters and flats that get the flat nationwide rate- markets that UPS doesn’t compete in, and, contrary to conservative political dogma, has never shown any desire to compete in.
Update: I received a tweet pointing out that the USPS offers flat rate Priority boxes and envelopes good for shipping anywhere in the US. That’s true- but it has nothing to do with the Universal Service Obligation- it was a marketing decision. The USPS has no obligation to provide a flat rate Priority option, and could eliminate it tomorrow if it chose to. (It’s also worth noting that the USPS now offers “Regional” flat rate Priority boxes that are cheaper than the nationwide flat rate boxes- zone based pricing by another name.) The “political challenge” Davis refers to is strictly the USO requirement.