The Private Postmen

Competing with the Government is supposed to be a hopeless task, but it is all too easy when the rivalry is with the U.S. Postal Service. By now stories of mail lost, delayed or damaged by federal carriers are wearily familiar. They have, if anything, become even more depressing since the USPS was set up 20 months ago to take over from the old Post Office Department. It is no surprise that many businessmen, tired of the slipshod service, are finding private ways to move mail more quickly and cheaply than the Government can.

Last year employees of Virginia Electric and Power Co. hand-carried 2,000,000 bills to customers in Richmond and other cities, at a cost per piece that was well below the price of an 8-c- stamp. Other companies are turning to New York-based United Parcel Service, whose familiar dark brown vans delivered 700 million packages last year in 43 states. The company's 1971 profit rose 71% to $59.8 million. But the newest competitors to the USPS are entrepreneurs who are setting up private post offices to deliver advertising circulars, and other third-or fourth-class mail.

Under federal law, only a USPS postman can put mail into a home mailbox. So the private carriers often hire housewives or students, for about $1.60 an hour, to stuff their clients' mail into plastic bags and hang the bags on homeowners' doorknobs. One of the biggest of the private postal services offices, Oklahoma City-based Independent Postal System of America, Inc., began operations five years ago. Last year it deployed 5,000 full-time carriers and 13,000 part-timers through 32 states east of the Rockies to deliver mail for clients who paid $3.5 million. The company collected another $2.5 million by selling routes to franchisees, each of whom paid $1,000 for the right to hang bags on the knobs of about 400 homes.*

Similar services have sprung up in Charlotte, N.C., Northern Illinois and throughout the Midwest. In Northern California, National Postal Service last year delivered 84 million advertising circulars and other third-class mail for J.C. Penney, Montgomery Ward and Sears, Roebuck, among other customers. N.P.S. was paid $33 per thousand pieces of mail, about $17 less than the USPS charges.

Postal Service officials try to dismiss their private rivals as "messenger services." Postmaster General Elmer T. Klassen admitted recently in congressional testimony that the Government corporation has been "so hellbent" on cutting costs that "we perhaps lost track of services." He pleaded for "more time" to build a fast, reliable service. National Postal Founder Peter Olsen proposes a different solution: have the USPS concentrate on handling letters and publications, and turn over all third-class mail delivery to the private entrepreneurs. Such mail has always lost money for the Government, Olsen notes, but "we have been making a comfortable profit"--about $170,000 last year. Besides, permitting private carriers to use mailboxes would eliminate what is rapidly becoming a suburban eyesore: the sight of plastic bags hanging on doors.

*A federal grand jury in Oklahoma City is investigating IPSA, reportedly for alleged fraudulent claims made in the sale of franchises.

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