The Mail Delivers the World to Your Doorstep
In 2014, the Postal Service generated revenues of about $12.5 billion from 4 billion packages. Billions of additional packages are delivered by other services.
Source: 2014 USPS Annual Report
Back to the Future
The package delivery market changes rapidly. The technology driving change now is the Internet, which provides a way for companies to spring into existence and grow rapidly. New companies are entering the market with innovative organizational systems and new delivery systems. Some major retailers are re-entering the delivery market themselves, and companies such as Amazon and Uber are only the tip of companies creating new delivery models dependent on local services and mobile devices.
The postal system and its partners continue to adapt. The Postal Service has partnered with traditional competitors such as UPS and FedEx, and has been introducing new delivery services to meet customer needs.
Monopolizing the Mail
Just about any transportation system you can imagine has been used to carry mail. For centuries the post was the only, and then primary, system of communication. Riders, stages and boats all carried mail between cities, nations and continents. All three were common sites in America’s colonial and early nation’s period. The Post Office did not own stages nor boats, but contracted with their owners for mail to be carried for the government.
In 1792 the Postal Act finally defined the postal system under the Constitution and Congress showed that it meant for the Post Office to be the nation’s communicator. The act prohibited the private transmission of letters or packets “on any established post road” or by “any conveyance whatever, whereby the revenue of the general post-office may be injured.” Newspapers were exempted, as were “special messenger” items. The Act required commanders of any vessels entering American ports “where a post-office is established” to deliver all letters not bound for another port to the postmaster.
By the 1840s postal revenues were seriously threatened by private express companies that operated within large eastern cities as well as between others. One estimate put twenty letters in the mails of private carriers for every one carried by the Post. In his 1843 annual report to Congress, Postmaster General Wickliffe put it bluntly. Congress had to either protect the department from the “inroads of private posts,” or find a way to fund the Department so it could fully operate for those who used it. In 1845 Congress moved to protect the Post Office, declaring it unlawful for any private express to carry mail wherever the U.S. mail was regularly transported. It reminded private expresses that they were liable for prosecution if they so knowingly carried the mail.
The 1845 law established the Post Office’s monopoly over letter mail, but left the door wide open for mail the Department did not carry – packages. As the volume of mail continued to grow in the mid 19th century, the Post Office continued to contract with transportation companies to carry that mail, whether between nearby cities, or to the far reaches of the growing nation. As railroads and stagecoaches broadened their reach, the Post Office broadened their use of these services to move the mail. In 1857 one of the largest mail to date was made with John Butterfield, whose overland mail service would, beginning in 1858, help draw the nation closer together by providing a steady, twice weekly, stagecoach service from the Mississippi River to California.
Private Delivery Services Thrive
While deprived of letter mail, private express services continued to grow through the second half of the 19th century. Along with privately owned railroad companies, their growth came hand in hand with power in Congress as board members and company presidents became senators and congressmen. While the growing strength of private carriers in Congress did not change the letter monopoly rule, it did help slow the introduction of new services, including Rural Free Delivery (which began on an experimental basis in 1896) and Parcel Post Service (which was finally established in 1913 after some of the more powerful congressional opponents had left office).
Early 19th century express companies such as Adams and Wells were joined by Fargo (who later joined forces with Wells), the United States Express Company, the Southern Express Company and American Express, among others. Express companies combined forces with each other (Wells Fargo) as well as with privately owned railroad companies, whatever worked best to further a company’s needs. Some of them (Wells Fargo, American Express) have continued to thrive and are household names today.
Private expresses thrived on delivering packages. Until the Parcel Post Service began in 1913, the closest the Post Office came to delivering packages was a regulation in 1872 declaring various classes of postage items and creating a fourth-class level of mail with a four pound maximum limit.
The package delivery system was rife with competition. Retailers, especially in cities, found it more practical to become their own delivery system for packages. Wagons (and later trucks) bearing the names of stores from bakeries to dress shops could be found traversing the streets of a number of urban areas. Some firms specialized in courier services, handling time sensitive documents between businesses within cities. One such company began as the American Messenger Company in Seattle in 1907. It changed its focus, becoming first Merchants Parcel Delivery and finally in 1930 the United Parcel Service (UPS).
Up in the Air
In 1918 the Post Office Department created the world’s first regularly scheduled airmail service. After relying on the Army’s pilots for a few months, the Department took over full force, hiring its own pilots, buying its own planes and creating airmail routes, most impressively a trans-continental route that carried mail from New York to San Francisco. In 1926 the Department began turning the service over to private carriers. Postal payments for carrying the mail helped fledgling companies get off the ground and laid the groundwork for the nation’s commercial aviation system.
Between the expansion of the national highway system in the 1950s, the growth of the nation itself – population, businesses, customers, etc., and the addition of long-range jet-propelled aircraft, America’s mailing industry reached out internationally on an unparalleled level. Private carriers continued to take advantage of technological advances and government deregulation to grow and prosper. Joining UPS as a carrier was Federal Express, which began operations in 1973 carrying letter mail as overnight express (thus avoiding the mail monopoly statutes).
Moving the mail continues to be a group effort. The Postal Service relies on commercial airlines, Star Route truckers and others to keep mail on track to reach your doorstep on time. The 21st century has brought new challenges and opportunities. The Internet has contributed to a decline in First-Class mail while it has boosted package services. In this new and complex delivery world the Postal Service not only competes with, but also works with companies like UPS, DHL and FedEx to keep mail moving to everyone.