Table of Contents

Multi-Modal Competition and the Future of Mail

Multi-Modal Competition and the Future of Mail

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

This compilation of original papers selected from the 19th Conference on Postal and Delivery Economics and authored by an international cast of economists, lawyers, regulators and industry practitioners addresses perhaps the most significant problem that has ever faced the postal sector – electronic competition from information and communication technologies. This has increased significantly over the last few years with a consequent serious drop in mail volume.

Chapter 19: Government Use of the Postal System: An Ignored USO Component

Michael J Ravnitzky and J.P. Klingenberg

Subjects: economics and finance, competition policy, public sector economics


* Michael J. Ravnitzky† and J.P. Klingenberg‡ 50 51 1 INTRODUCTION As the number and variety of available communication channels proliferates, postal services continue to play a vital role as a fundamental method for government/constituent communications. The government is a significant customer of the mail and a major postal stakeholder. Governments rely upon their ability to administer operations and reach all their citizenry and constituents via the mail. The purpose of this chapter is to review the government use of mail in the United States and its implications for the Universal Service Obligation (USO). The United States Postal Service (USPS) comprises a communications backbone for all levels of government in the United States, ensuring reliable and timely delivery of messages essential to governmental functions. Though some government mail is vulnerable to electronic substitution, a comparison of United States First-Class mail revenue to the US government’s expenditures on First-Class mail indicates that government usage of postal services is comparatively resistant to substitution. US federal government agencies, in total, spent at least US$1 billion on mailing and shipping services each year between 1997 and 2010.1 State and local government spent at least as much, and the mail volume from state agencies does not appear to be declining.2 This chapter identifies three ways in which governments could mail more efficiently, significantly reduce postal expenditures and also promote mail-handling efficiency. Section 2 discusses why governments use the mail, and reasons why communicating  by mail is important to the government. Section 3 describes the size...

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