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2WTK: Why The Government Doesn't Use The Post Office

10:06 PM, Mar 25, 2013   |    comments
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It's the United States Postal Service. So, why isn't the United States Government using the USPS more than other businesses?

According to a report by the Office of the Inspector General, the Postal Service got only a small slice of the Federal Government's business last year.

Federal agencies spent $337 million on shipping.  The financially troubled Postal Service got just $4.8 million of that, which is only 2% of the business.

Cathy Young says, "That is surprising because you'd think that would be the first place that they'd go to and try to work with the United States Postal Service and boost them up."

But Cathy, who's in the business of shipping, understands why federal agencies turn to private services, like FedEx and UPS. While the Post Office has made great strides in making money on flat rate boxes, when it comes to larger and heavier packages, it loses out.

"You know when the size of the package matters, UPS and FedEx, are, can be cheaper than going through the United States Postal Service."

According to the Washington Guardian, the Postal Service waited too long before forming partnerships with federal agencies. FedEx and UPS went after government business 11 years ago, while the Postal Service didn't start to form partnerships until 2009.

Brad Kalbfeld of the Washington Guardian says, "One thing the Inspector General found is that the Post Office doesn't have a large enough staff of dedicated sales people who specialize in selling to government agencies."

Investigators say, adding guaranteed delivery, like private shippers, could position the Post Office to bid on government contracts generating $34.8 million more a year.

Competing with private shippers, to penetrate the market, could be difficult for the Post Office, because federal law prevents it from discounting prices and taking loss to generate business, while trying to make up the money on other services. 

 That's why it has to look at cost cutting measures, like Saturday delivery on first class mail.

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