Netflix can't be happy
Mail that birthday card earlier: U.S. Postal Service plans to halt guarantee ofnext-day delivery
Next day delivery through the U.S. Postal Service will soon be a thing of the past as the mail carrier announced Monday they will no longer guarantee arrival of first-class stamped mail within one to three days. The shift comes amid threats of bankruptcy and is part of a broader plan to reduce costs by $20 billion within three years.
The changes are potentially harmful, as recognized by S&P Capital IQ analyst Jim Corridore in a story by NPR, in which he points out, "Over time, to the extent the customer service experience gets worse, it will only increase the shift away from mail to alternatives. There's almost nothing you can't do online that you can do by mail."
Corridore’s concern is well placed: In a market that is increasingly moving towards the Internet and a youth that mostly refers to physical mail with nostalgia, where does the USPS fit in? Now that delivery will be slowed to two to three days, even some of the baby-boomer hold-outs must be considering the possibility of abandoning physical mail for services like bill payment or during tax season.
And what about businesses that depend on delivering time sensitive packages directly to customer’s residences? Netflix is already struggling to keep its DVD-by-mail service afloat, and an extra day or two added to delivery times is sure to further stunt growth in that portion of the company’s business.
Even though the physical delivery of mail is less relevant now than it was just 50 years ago, shrinking the Postal Service will effect a much broader portion of the nation than just those who prefer to send a hand written letter over a typed out e-mail. From corporations to citizenry, the impact of these cuts seem to have a more profound effect than just forcing customers to conduct their business online.
It’s impressive to think that for over 40 years, one could send a piece of paper anywhere in the United States and have it arrive the next day for under 50 cents. Now that next day delivery is going away, and with the vast amount of debt still facing the U.S. Postal Service, how much longer can the government viably support the independent agency?
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The U.S. Postal Service’s full press release can be read here.