When Monopolies Fail

Postal Service Fails to Gain Federal Contracts

 

Let’s face it–monopolies are not supposed to fail.  By their very nature they have captured a market to the extent that they control the vast majority of business and are often, by hook or by crook, able to set prices and the terms and conditions of business.

The description sounds a bit like municipal fire and EMS departments who are interwoven into the community fabric to the extent that any alternative seems impossible, even outlandish.

Few institutions are more interwoven than the US Postal Service, the hidebound invention of the legendary Benjamin Franklin who served as Postmaster General.  Despite their history and longevity, they are in serious trouble, and have been for years.  According to the NYT the USPS had a net loss of just about $16B last year.

The USPS Office of Inspector General recently published a report detailing that 98% of federal government long-term shipping contracts were going to United Parcel Service and FedEx.  The Postal Service is failing to capture the business of its own federal partners.  Of the $337M in 2012 federal shipping contracts, the USPS had just $4.8M, or less than 2%.

Mail volume is down and some say that fire volume is down too.  Both UPS and FedEx gained a solid hold by providing services that USPS would not provide or could not provide by congressional action.  In fact, congress, the USPS equivalent of a city council has dithered while the USPS has been bled white by poor decision-making and outmoded business practices like Saturday delivery.

The USPS faces a perfect storm or confluence of business factors that was slow in forming but which now represents a pack of hungry jackals nipping at their prey.  Who knows where the USPS would be today if they had rapidly dropped outmoded business practices and if Labor had reacted quickly and effectively to looming competition and the Internet?

The first replacement of the “USPS styled fire department” is already here.  It is, of course, the fully integrated Fire/EMS department able to provide high-quality ALS treatment and transport using multiple platforms.  If your’s is a fire department uninvolved in EMS treatment and transport or dabbling at the edges, you are pedaling the equivalent of a 10-cent first class stamp.

The psychology of monopoly is ugly and failure-ridden.  Providers talk and act like they are the only game in town, trashing customers they perceive as being unworthy of their service or compassion.  Social media, especially Facebook, have opened an ugly eye onto “professionals” who take to the Internet to speak disdainfully of those they are paid to serve.  Such talk is  sure evidence that the talker sees no connection between their salary and their sarcasm.  Vent if you must, but do it at the coffee table.

The USPS is done for in its current configuration in part because of tradition, bureaucracy, and the inertia of management and labor leaders.  Whether it survives at all will depend on the success of radical and painful surgery.

Ben Franklin started the first post office and the first fire department.  Let’s learn from the letter carriers and make him proud.

 

 

 

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FE Talk: Humpday Hangout

Comments
Glenn
Some Kimchi Blow Back
I have been contemplating our response to a N. Korean movie maker producing a comedy based movie with a story line about the assassination of our President. I can’t believe that we would hack into their government IT systems. Of wait, we already do that. Never mind.
2014-12-19 14:37:11
Eric Lamar
Some Kimchi Blow Back
S- Nail on the head. Imagine if Iran made a film, comedy or otherwise, about the assassination of Obama. The S@#t would hit the fan. But, somehow, it's OK if we do it. E
2014-12-18 22:54:39
Victoria Huckenpahler
Some Kimchi Blow Back
What's most disturbing about this is that, however great or little their involvement, North Korea has won a cyber-war. This does not bode well for the future, not only for our relations with N. Korea, but with other terrorist states. I agree it was foolhardy to invite the inevitable by making this film.
2014-12-18 22:33:08
Mike
Some Kimchi Blow Back
Well done Mr Kim! I hope the movie is as funny as all the drama it cause. I guess we will just have to wait for it to make its way to the $5 table at Walmart to see it. That were is get to see most movies anyway.
2014-12-18 22:24:23
Smitty
Some Kimchi Blow Back
That's right, Eric. It was the studio who decided they would lose too much money if they distributed the film and nobody came to see it. Besides, you're right on point about a film that never should have been made. Do we ever ask ourselves how we'd feel if the tables were turned?
2014-12-18 21:31:09
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