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I recall reading an article years ago in which Jeff Bezos was quoted as differentiating cyberspace (the land of virtual reality and digital interactions) from meatspace (the land of physical reality and physical interactions). There seems to be a quasi-meat tying them together — spam.
This was brought to mind recently when I read a provocative piece by Georg Jensen about how the US Postal Service (USPS) has evolved into one of the largest spam mail systems in the world.
Jensen’s observation is firmly based on facts. The USPS charges individual customers inordinate fees on a per-ounce basis while bending over backwards to accommodate and incentivize bulk mailing operations for catalogs, marketing operations, and big business. As Jensen puts it:
Just as General Motors has in effect subsidized Big Oil by continuing to build gas-guzzlers in recent years, so has the USPS continued to subsidize Big Mail by shaping its operations to encourage what it now calls, revealingly, “standard mail” — that is, advertising junk mail. Most American citizens are blissfully unaware of the degree to which USPS subsidizes U.S. businesses by means of the fees it collects from ordinary postal customers. For example, if you wish to mail someone a large envelope weighing three ounces, you’ll pay $1.17 in postage. A business can bulk-mail a three-ounce catalog of the same size for as little as $0.14.
The comparisons with GM don’t stop there. As we’ve all read, part of what held GM back was the burden of major concessions to labor unions when times were good. The USPS has this same problem. As Jensen puts it:
Its bloated payroll of 800,000 employees—third only to the Department of Defense and Wal-Mart—makes up a whopping 80 percent of its operating expenses (UPS and FedEx spend between 37 and 51 percent).
It sounds a lot like the problems facing GM when contrasted with Japanese and European manufacturers who have set up shop in the US.
The USPS faces many challenges but, like too many legacy American businesses, seems to be milking a cow that’s running dry while competitors (UPS, FedEx) adapt with copy centers, business services, and worldwide operations.
For publishers, the problem is that the USPS may be headed for trouble itself. It’s a quasi-governmental organization with a fading business model, huge legacy costs, an untenable service level, and threats from superior delivery options (UPS, FedEx, the Internet).
The fact that the USPS is becoming a spam mailer in meatspace is a symptom of deeper problems.
Will the upcoming travails of the USPS force publishers to confront even more directly the inefficiencies of print publication? Are delivery and distribution really the Achilles’ heel of the print paradigm?
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May 5, 2009 at 10:24 am
Bulk mailers get low rates because they do a lot of the work for the USPS. Their pieces arrive at the Post Office pre-sorted down to the order in which the mail carrier will hand them out on his or her route. Minimal processing by the USPS is required, so the mailer is rewarded with lower fees.
A more accurate comparison is the cost and convenience of mailing a letter through the Postal Service and mailing the same letter through FedEx or UPS. The latter generally don’t pick up mail from your house, charge extra for Saturday delivery (or don’t deliver at all on Saturday), require the sender to complete a form (you can’t simply write an address on the envelope), and charge significantly higher fees for low-weight items.
FedEx and UPS are successful because they handle the most profitable mail services and ignore the rest. If the USPS could eliminate services that these other organizations were never required to provide, it could probably be just as profitable.
May 5, 2009 at 11:09 am
All true, but it’s still spam. As for letters, the Internet distribution system has taken that over, by and large. I think the postal system is changing fundamentally, and the USPS is chasing spammer revenues by continuing to adapt its systems for bulk mailing and rewarding bulk mailers. Interestingly, the distribution system we use more often (the Internet) is spending its time guarding against spam. I think it’s clear which one is gearing up for the customer and which is cynically milking its traditional business.