No one can use mailboxes, except for the US Postal Service, and that’s a significant disadvantage for anyone trying to compete with them in the delivery of mail. And no one wants to compete with the USPS on delivery of first class mail. FedEx nor UPS cannot, in their wildest dreams, deliver a letter for 46 cents. Never happen. The USPS is also very competitive on small package delivery. Their flat rate box delivery dominates on e-Bay sales for just that reason, and they do offer tracking.
FedEx and UPS dominate on overnight delivery and for good reason; you pay for it. Their infrastructure has allowed them to become very competitive on non-overnight delivery.
The US Postal Service actually does a pretty good job given their mandate and the constraints of their service. Their priority letter delivery sucks by comparison to FedEx and one will note that they don’t even guarantee overnight delivery…even though that’s what you’re purchasing. It’s in the fine print!
The single biggest problem the USPS faces, aside from the decline in the use of first class mail, is that it is mandated to deliver everywhere, to almost every address, within the USA. 99.9% of Americans have never lived anywhere where daily home delivery and pick up of the mail was not available. Like all similar businesses, the USPS largest expense is not labor, it’s fuel. And unlike UPS or FedEx, it cannot raise its rates when the cost of fuel goes up. Those approaching this subject from a privatization basis should consider how attractive the business might be if entering it with fuel at $2/gallon and that fuel then went to $3 or $4 and you could not raise your rates to pay for it. There are labor burdens and union contracts to deal with, but they are no different than those contracts all of government is dealing with, in that they were written in an age when pensions were the norm, people did not live all that long post-retirement, and health care costs were not careening into the stratosphere.
What might aid consumers best, save the USPS, as well as improve the services and capabilities of the USPS putative competitors is changing the law to allow FedEx and UPS to deliver their packages and letters to local USPS offices. FedEx and UPS excel at getting things from one place to another which are a long way apart. They have trouble competing between locations close together and the whole home delivery aspect is a drag on their business model. A modified system could enable the consumer to place a FedEx letter in his mailbox and get it reliably delivered overnight, with the same convenience as were they mailing a first class letter, with billing being the only real issue, but a surmountable one. The advantage to those private businesses, FedEx and UPS, would be that they wouldn’t have to send multiple trucks to small communities…the USPS already has trucks in place, operating six days per week.
And, of course, crony capitalism comes into play as in almost everything the government does. The biggest money loser for the USPS is bulk mail delivery, junk mail, which it is forced by law to offer at a rate which ensures it loses money. Try to outlaw that subsidy to business, and it is a subsidy, and you’ll hear an outcry from businesses all across the nation. The reason you get so much junk mail is that it’s cheaper to send than your gas bill is. The USPS would love to either get out of that business or, at least, be able to charge appropriately for it.
Every mail service in the world is going through this and dealing with it one way or another. In America, it’s the same old debate; Americans want cheap, fast, reliable mail service that they don’t have to pay for.