Estimates of Postal Revenue Losses if Time-Sensitive Business Letters Were Exempted From the Private Express Statutes

GGD-79-39: Published: Apr 17, 1979. Publicly Released: May 1, 1979.

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An estimate was requested of the potential impact on postal revenues if time-sensitive business letters were exempted from the Private Express Statutes. Developing such an estimate is quite difficult, primarily because of the uncertainties relating to the volume of mail, competition faced in providing time-sensitive services, and problems in enforcing provisions of proposed legislation.

Proposed time-sensitive legislation would have exempted time-sensitive letters from the Private Express Statutes, thus granting the Postal Service a monopoly, subject to certain exceptions, on the carriage of letters. However, the legislation was not enacted. If the proposed modified version of legislation is enacted, Postal Service revenue losses will most likely come from Express Mail. Some business-to-business first class mail may be diverted. However, proposed time-sensitive provisions would be modified to exclude letters previously carried by first and third class mail. The uncertainties relating to the willingness of private carriers to compete with the Postal Service and the difficulty in detecting changes in the mail stream make it impossible to project the impact of the time-sensitive exemption on first class business-to-business mail. However, based on a 1977 volume of 17.3 billion pieces, each 1 percent of the mail diverted to private carriers would result in a $15.5 million revenue loss. The Postal Service may have difficulty in enforcing the proposed provisions to prevent abuse of the exemption because the wording is vague. To determine whether letters must be delivered on a time-sensitive basis may require questioning the sender and/or receiver as well as opening and reading the letters. In the past, opening mail led to adverse public opinion and litigation. The debatable question is whether the private carrier's service is better than or comparable to the Postal Service's.

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