This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Royal Mail Provides a Model for USPS

NEW YORK ( TheStreet) -- While in Sheffield, England recently, I decided to mail our vacation presents back home rather than hauling them on the plane. So we visited the Royal Mail.

We didn't go to a stale government office, but to a brightly lit section of a local department store, which is open during store hours, not just during mail hours. The people there were very friendly. Even the other customers were nice.

We learned the Royal Mail does a lot more than send letters.

It helps develop and produce mailers and leaflets. It cleans and maintains mailing lists. It handles business mail accounts online. You can even have the Royal Mail hold your mail while you're away, instead of having the neighbor's kids paw through it.

All this was in place long before the government decided to sell off about half of the operation, valuing it at $4-$5 billion according to the BBC (although some estimates are higher), and retaining a stake of about 40%.

The Royal Mail, it is said, is even profitable.

Meanwhile, the U.S. Postal Service is planning yet another price hike, this one to 49 cents per first-class stamp. Like previous hikes, this has to go before government regulators. The mail service said it needs the $2 billion hike because it will lose $6 billion this year. It will also want to cut the number of offices, and reduce delivery schedules.

(Although the USPS is an independent agency of the federal government, for decades it has received very little in taxpayer money. It receives $100 million a year -- less than 1% of its annual budget -- from Washington to cover free mailing privileges for the blind and overseas voters, according to Politifact.)

The contrast between my local post office and the Royal Mail offices could not be more stark. The services here are very limited, the office itself is dusty, the employees concerned mostly about their jobs and pensions.

All this changed my own mind about privatizing our postal service. Now I'm all for it.

This has nothing to do with cutting workers' wages or reducing services. Just the opposite.

A private U.S. Postal Service could dramatically expand the range of services it offers. It could sell off much of its real estate and rent offices in local department stores. It could do more than just process passport applications and sell money orders . It could become a bank or a small business' international trade office.

Federal Express (FDX - Get Report) and UPS (UPS - Get Report) could use that competition.

These two big shippers now have retail arms. FedEx bought the old Kinko's copying chain and UPS bought Mail Boxes Etc. But frankly, those offices are about as friendly as the post office. They're nothing like the Royal Mail.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
UPS $97.62 -0.48%
FDX $169.59 -0.21%
GOOG $555.34 -1.70%
TSLA $234.74 7.50%
YHOO $44.64 0.27%

Markets

DOW 18,113.11 +32.97 0.18%
S&P 500 2,119.34 +1.65 0.08%
NASDAQ 5,090.4830 -1.6020 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs