Buzz
As more people in the U.S. turn to email and other digital communication methods, the U.S. Postal Service has felt the financial strain. In 2011, the agency faced a $10 billion loss, with projections suggesting that this year’s losses could surpass that, leading many experts to speculate about the future of the service. So, what’s stopping you from creating a competing service?
The law, actually.
Back in 1792, Congress enacted the Private Express Statutes, a set of regulations that made it difficult for independent operators to start their own mail delivery services. These laws imposed fines to deter anyone from transporting letters for a fee without authorization.
How do the tricksters at FedEx manage to get away with it? There are a few legal loopholes. Congress permits privately transporting letters that are deemed ‘extremely urgent.’ This is how carriers like DHL continue their operations. Moreover, the USPS is fine with private carriers handling letters, as long as they bear valid postage with the proper cancellation. Essentially, you can deliver mail on behalf of the Postal Service, as long as the USPS receives payment for the stamps.
Has Anyone Attempted It?
Spooner’s primary focus was to make a political statement about the government’s monopolistic practices, yet the American Letter Mail Company found early success. Spooner established offices in key East Coast cities and used both ships and railroads to provide faster, more affordable mail delivery. Customers clearly appreciated the lower prices and quicker service, making Spooner a strong competitor to the USPS.
Naturally, the government didn’t make it easy for Spooner. It targeted railroad owners who helped transport his messengers, and Spooner himself faced the threat of imprisonment for bypassing the government’s monopoly. Despite these challenges, he kept delivering mail, and eventually, the USPS was forced to reduce its prices to stay competitive. The price of a stamp dropped to just a nickel.
Spooner wasn’t done yet. He further slashed his rates and continued mailing letters. In 1851, Congress had to step in with new regulations to safeguard the postal monopoly and another rate reduction, bringing the cost of a stamp down to three cents. These new laws eventually forced Spooner out of business, but his efforts had already lowered the price of stamps by 75%. Meanwhile, other private carriers quietly profited as Spooner diverted the government’s attention.
This article was first published in 2010.
