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Should the USPS Diversify into Nonpostal Markets?

Sheli Wrote: Aug 01, 2012 4:12 PM
Highrise mail delivery in Chicago has been problematic for years. Our building now has a mailman who refuses to deliver mail if the apartment number is not on the envelope. Over the last 2 years they all got new cars. They used to drive to their route in their own car. It wouldn't be much of a loss if they closed. Someone should develop a kiosk where you drop in a quarter and send an email. It would be cheaper all around and certainly faster.

One possible solution offered up for the struggling U.S. Postal Service is to allow it to diversify into nonpostal commercial markets (e.g., insurance, logistics, banking, etc). After all, the share of revenue generated from diversified products at foreign posts has been on the rise and in many cases now accounts for the majority of a post’s revenue.

However, a new paper from postal expert Michael Schuyler concludes that the USPS entering “new nonpostal commercial ventures would probably end badly.” Here are some of the important takeaways from Mike’s paper:

  • “When foreign posts move into nonpostal markets, they often...