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Currently, there is a lot of discussion in my home country (Brazil) about privatization of the postal service, so, of course, the United States comes to mind for comparison:

  • It is a country of continental dimensions.
  • It is known for many services being privately run.

I did a quick check and read this question and it shows that even without the pre-funding of the pensions that started in 2006, USPS is not consistently profitable, having only operated at a profit for 4 years ('03–'06) and losing money all the other years, requiring public and/or private subsidies to stay afloat.

Magazines and other news outlets are all over the place⁠—The Economist has their most recent piece on this subject in favor, Forbes has one against⁠—but it looks more like an opinion article and Fortune had this one that evidently didn't come true.

So that begs the question: What are the factors in play that still keep the USPS a government service? and by factors I don't mean "It is in the Constitution" or any other legal structure that regulates the postal services or federal agencies. Those can be changed if there is enough interest from the people at power.

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  • Comments are not for extended discussion; this conversation has been moved to chat.
    – CDJB
    Jul 11 at 8:38
  • I heavily object to the framing of the question: please clarify why you word it as if it were an inevitable thing that the USPS will be privatized?
    – Hobbamok
    Jul 12 at 10:55
  • @Hobbamok check the comment just above yours or the second bullet point on my question - the US is globally known for having many services that are typically government run in other countries being privately run Jul 12 at 11:17
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Not being run by the government will not make the postal service "consistently profitable". In itself it will change nothing. What could make it profitable is to make some kind of sacrifice: either we decide that everybody must pay more for it, or that people who live alone in the mountains will stop receiving letters. These are sacrifices that a private company will totally be willing to make but that the government does not want to.

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    In itself it will change nothing: privatization generally means that surplus value will be extracted (eg in the form of dividends, or just money taken out by whoever then owns the postal service). That means once privatized, the organization needs to create more value than before just to stay even (ie cut services or increase prices more than what would be required if still nationalized).
    – tim
    Jul 9 at 12:48
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    Thanks for the answer! Do you have any source to elaborate on your arguments? And furthermore, why is "must pay more for it" and "people who live alone in mountains will stop receiving letters" so inacceptable for the US Government when this is exactly what happens with health care in the US, for example? Jul 9 at 14:34
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    @JulianaKarasawaSouza Healthcare in the US is run by the private sector, not by the government. The answer is essentially claiming that the same thing that's happened to the US healthcare system (inflated prices, lack of service for certain individuals) will happen to the US postal system if it gets privatised.
    – F1Krazy
    Jul 9 at 14:39
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    @user253751: The usual rationale is "so that our pricing structures are easier to understand." See for example USPS's flat-rate boxes.
    – Kevin
    Jul 9 at 19:53
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    @jamesqf The part about living alone in the mountains does stand up. USPS even operates a mule train to deliver mail and packages to a village at the bottom of the Grand Canyon, and operates floatplanes to get mail to roadless places in Alaska. UPS and FedEx can cherrypick the locations they deliver to (did you notice that some online sites don't even deliver to anywhere in AK or HI?). And as a matter of fact, where we live (also in the mountains), UPS and FedEx sometimes drop off their packages at the post office, and USPS delivers them to us. Jul 10 at 4:33
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There are several reasons why the post office isn't privatized. For starters, in the U.S. the Post office is an enumerated power of congress, they essentially have full control over locations, allowed routes, and general operations. A private company would probably not ever want to have congressional approval for any material changes. Another reason not to privatize is that no one has demonstrated it's remotely possible to be a profitable company with the scope of the USPS, even today every courier service relies on the post office for last mile delivery for a huge amount of households.

No company has the volume the USPS does either, Fedex delivered 3.13 billion packages in FY2021, which is about 8.5 million per day. UPS managed about 21.1 million packages per day in a peak pandemic quarter. The USPS delivers 24.1 million packages per day in addition to 429.9 million pieces of mail per day.

Finally, the USPS is the official source of citizen to government contact for a huge number of matters. Which means there is a significant incentive/soft requirement that mail be as cheap and accessible as possible. That is not exactly an attractive proposition to any private company.

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  • FedEx does not have a monopoly on non-government delivery services. You should be comparing USPS volume with the total of all the major players, including companies like Amazon who run their own courier services.
    – alephzero
    Jul 10 at 1:21
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    "No company has the volume the USPS does either, " Might be worth mentioning that USPS has a government-granted monopoly on mail... so it makes sense it'd have a higher volume. If UPS or Fedex were allowed to deliver mail, then the stats might be very different.
    – NPSF3000
    Jul 10 at 1:48
  • This doesn't really address the political concerns OP says they're most interested in.
    – lly
    Jul 10 at 6:40
  • Comments are not for extended discussion; this conversation has been moved to chat.
    – CDJB
    Jul 15 at 14:59
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There are several reasons why the post office isn't profitable and they are all out of the control of the post office itself. It should also be noted that the post office is self funding.

Honestly when you look at the history and realize expenses have been put on the postal service because it was to profitable the problem should become clear.

https://www.barrons.com/articles/usps-louis-dejoy-post-office-pelosi-mail-in-ballots-51597687253

For starters, there is no reason the post office should make money. It is essentially a federal agency with a universal service mandate. It costs the same to mail a letter to rural America as it does within densely populated cities, but publicly traded logistics companies charge more for deliveries to areas off the beaten track.

Second, the USPS, essentially, doesn’t directly control what it costs to mail a letter. Congress, for instance, rolled back a 2-cent stamp-price increase in 2016 because lawmakers decided the Postal Service had recaptured the sales declines associated with the 2008-2009 financial crisis.

The price of a stamp is a political issue. The price to mail a package via either FedEx (ticker: FDX) or United Parcel Service (UPS) is simply a question of competition and strategy.

A third critical factor is that around 2006, lawmakers imposed new expenses on the USPS, in part because it was too profitable.

It’s a heavy burden, but for what? Congress required the Postal Service to prefund its health-care obligations. No other company has to do that, though companies have to prefund pension liabilities, a requirement that became part of the law in the 1970s.

https://news.nd.edu/news/postal-service-losing-money-because-of-congressional-mandate-not-low-prices-expert-says/

https://thehill.com/opinion/finance/368753-theres-more-than-one-reason-the-postal-service-is-losing-money

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    @JulianaKarasawaSouza The way I read your question is you are asking it because it is not profitable.
    – Joe W
    Jul 9 at 15:38
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    There has been a constant thrust from the political right in the US, to privatize the US postal service, and reduce the number of federal postal workers. Already, most of the rural US is no longer covered directly by USPS, because congress forced them to use more private contractors. Most Native Americans, cannot get mail delivered to their homes or even mail-box on a rural route, instead they have to drive tens of miles into a town to collect it from an expensive, privately run post office box. The primary driver countering this trend are Democrats.
    – jwdonahue
    Jul 9 at 21:04
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    @Juliana Karasawa Souza: If the USPS isn't at least potentially profitably, how could it possibly be privatized? Nobody wants to buy a company that's going to lose them money forever.
    – jamesqf
    Jul 9 at 23:56
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    @jamesqf post mail is not just about buying stuff online, it's also about legal documents, some of them requiring taking fast action
    – spectras
    Jul 10 at 1:52
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    @jamesqf obviously they would buy an unprofitable company in the hope of making it profitable by stopping delivery to all those expensive far-away places.
    – user253751
    Jul 12 at 8:59
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There have been certainly been proposals in the U.S. to privatize the postal service, mainly from the "small government"/libertarian-leaning faction of the Republican party. (The Democratic party tends to be skeptical of privatization in general.) But none of them have caught on yet, and I think the reason is very simple: voters don't want a change.

The U.S. Postal Service is consistently the most popular federal agency in national polls, with an approval rating of over 90%. Voters are not clamoring for a major overhaul, and many would be upset if they got one. Rural areas in particular would probably see both a rise in mail prices and a loss of mail-related jobs if the post office went private—and since rural areas generally lean Republican, there are a lot of Republicans in the House who would be going against their constituents' wishes if they voted for privatization.

Since members of Congress generally enjoy being reelected, the wise choice is to leave the USPS alone, or to make only incremental changes instead of drastic ones.

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    Your answer hits the main notes: 0% Dem support and too much risk of blowback for the Republicans who might otherwise support it. It could still be improved by some further discussion of the Dems' particular support of the USPS. It's not just another privitization; it's a massive union and they have particular feelings about it.
    – lly
    Jul 10 at 6:31
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    Also the massive present interest by Dems in expanding mail-in voting. Privitizing the mail while doing so would be... counterproductive, to say the least.
    – lly
    Jul 10 at 6:39
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    "Rural areas in particular would probably see both a rise in mail prices and a loss of mail-related jobs" => not necessarily. The government could continue subsidizing mail in those areas without having the USPS in public hands overall. Just because 10% of the company wouldn't work in private ownership doesn't mean the other 90% can't be in the free market. Jul 10 at 16:35
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    @JonathanReez They could, but it would be an arguably realistic fear and not unprecedented that corporatization leads to privatization, and privatization leads to service cuts. The government would probably guarantee affordable mail delivery service, but whether the local physical branch would remain open is another question, and it certainly wouldn't be staffed by someone with the employment benefits of a federal government employee.
    – gerrit
    Jul 12 at 8:30
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    Not only would the citizens of rural areas complain about losing postal coverage, but the Republicans that represent them in Congress would lose the free advertising that they get to their constituents by the franking privilege.
    – DrSheldon
    Jul 12 at 15:33
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Beyond costs, if the USPS was privately operated, it could choose what mail to deliver and what not to (votes, census data, taxes, etc.). Oversight would be limited to a board of directors at best, and if they lean one way or another, watch out. Because it's private, free speech would also not be guaranteed. Would you want that? Imagine if someone releases a statement saying that because they don't agree with the mail you've been sending, they're no longer going to serve you as a customer? It's the choice of a private business whether to serve a customer. Not to mention they could start competing sorta like Amazon, with the businesses they serve in really dirty ways if that's a primary means of communication for legal documents, patents and trade secrets, and other things. I guess you could sue them, as long as you or your lawyer never needs to mail a document. Certified mail - certified by who?

They could pull out of neighborhoods like grocery stores do, based on a profit motive. If it's a non-profit, who are the donors and what is their political party, and what is their motive? if the ADL or ACLU was found to be funding the private non profit company, people may be OK with it, or maybe not, what if it turned out to be the Proud Boys.

Just for laughs, what if the MyPillow guy ran it.. heh :)

I'll stretch my argument a bit to conspiracy and say that if a private company had the reach that the USPS has, they could execute massive surveillance rather easily. If you don't think foreign ownership of the private company wouldn't be a problem, could you imagine if the US controlled the mail system in China?

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    Well, in most countries which privatized their postal services, they accompanied that by laws and regulations which make sure that postal services do not operate under anarcho-capitalist rules.
    – Philipp
    Jul 10 at 9:07
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    Privatization doesn't mean that it's unregulated. The telephone system is private, but they're not allowed to limit use the way you describe.
    – Barmar
    Jul 10 at 10:48
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    The US did control the mail system in China for decades. It's where postal map romanization ("Canton", "Nanking", etc.) came from.
    – lly
    Jul 11 at 6:15
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    "could you imagine if the US controlled the mail system in China?" - many American people will likely see that as a good thing. It should be "could you imagine if China controlled the mail system in the US?"
    – user253751
    Jul 12 at 9:00
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    @DanChase yeah so the question is what if they did? Then people wouldn't like it. Which is the point.
    – user253751
    Jul 13 at 9:36
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The post office is public because the ability for the federal government to create the post office is written into the constitution. Initially this was to have a government agency that could perform the required tasks of the nation (census, taxes, etc) however as we've developed more ways to contact people the post office's public status has come into question numerous times as unnecessary. It's financial losses were a big topic ~10-20 years ago and it's monopoly position hurts consumers.

I'd also like to comment that some people have said "Not being run by the government will not make the postal service "consistently profitable"". This is incorrect, as required of private companies to exist long term they must either be profitable, get purchased by a profitable service, or go out of business.

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    Why do you think a truly private post office going out of business is impossible? (If being purchased requires taking on the obligations, how is it so sure that someone who purchases it would be able to fulfill the obligations more profitably?) Jul 11 at 20:30
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    As a private organization it would either (a) go out of business, or (b) reduce coverage. In either case it would no longer be "the post office" it would be a company that delivers mail in some areas. Most likely Alaska and Hawaii would be dropped immediately, without any attempt to make them profitable.
    – jmoreno
    Jul 12 at 3:08
  • @jmoreno There's a third option: (c) the government would pay the private company to guarantee service to areas that are otherwise unprofitable.
    – gerrit
    Jul 12 at 8:34
  • @haxonek Thanks for the answer, but please note that I very specifically mentioned that I wouldn't accept any that mentioned "it is written into the Constitution". Any law and constitution can be changed through sufficient political interest of the powers-that-be Jul 12 at 11:25
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    @jmoreno Yet this model is surprisingly common. Maybe the private companies benefiting from this fund the electoral campaigns by the politicians?
    – gerrit
    Jul 12 at 19:04
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It's a tradeoff between cost and universal coverage, and universal coverage has been determined to be more valuable than cost.

It's mission statement:

The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.

It's Motto:

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Neither the mission statement nor the motto would be a good fit for a private organization. Now, it's arguable whether it's mission statement is still necessary, and of course the motto is an ideal and plenty of drivers have been know to just throw it in a trash can. But a private organization would not have the same goals and would definitely not have the same coverage.

Which leads to the final point -- nobody is actually in a position to do so. It delivered more than 10x the mail of it's main competitors combined. None of them (or anybody else) is in a position to take it over and continue it's service. Given what it does, unless it's a fireside sale to a good buddy, I don't think anyone that would be even slightly interested could actually afford to purchase it.

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  • Thanks for the answer! However, I don't see a causal relationship between the factors that you mentioned and the lack of political interest in privatizing the USPS Jul 12 at 11:29
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    @JulianaKarasawaSouza: That’s answered in the very first sentence. As with all things, there’s a trade off, and just about everyone comes down on the side of universal coverage, as they have since the nation’s founding. There’s no political interest in it, because other than attacking a few big businesses that use it, there’s simply no support for raising cost let alone privatizing it.
    – jmoreno
    Jul 12 at 11:55
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The short answer is that the USPS is not a private corporation for exactly the reason you state; delivering the nation's mail is not a profitable enterprise. So, nobody else wants to shoulder that particular burden.

Oh, other companies will definitely chip away at the market of mail and parcel delivery, where there is money to be made in various niches. Small-package delivery, courier services, overnights, etc. When it's larger than a first-class letter, and/or absolutely has to be there on time and in good condition, that's where people are willing to pay the premiums that make the service profitable, because they see the value added to the basic service of getting something from here to there. The USPS then has to compete against these other services on price, lowering its margins in these value-added subsectors, reducing its ability to offset losses in its "core" business of letter-carrying.

Now, that doesn't really answer the question of why the basic service of letter-carrying is so unprofitable. The answer to that is more complex and more than a little political (so you're in the right place). At its most basic, the problem is a similar one to most public utilities and services; the ability to meet the infrastructure costs required to reach absolutely everyone, no matter how remote or inconvenient.

This is a deceptively simple mandate, that belies most of the mammoth cost of the U.S. Federal Government. It's the Pareto Rule at its finest; 80% of the time/money/effort is spent on 20% of the finished product. It's easy, and therefore cheap and profitable, to provide things we consider basic services to about 80% of Americans that live in or close enough to a population center that this denser infrastructure can handle their demand at a feasible maintenance cost. Running electrical lines, a water main, sewer conduit and fiber-optic cable twenty miles away from the nearest connection points out to one customer out in the boonies inflates the costs of this infrastructure considerably, especially when you multiply that by the roughly 72 million people in 25 million households making up the other 20% of the nation's population.

Most for-profit service providers, even of what we truly consider essential services like electrical and water, simply don't bother trying to reach anyone they can't get to profitably. Certain electrical delivery providers specialize in rural power grids, and they charge through the nose for the longer drive times and higher poles-per-customer count of their service areas. If you're not close enough to a municipal water infrastructure, you get your water from a well. If you're not close enough to get minimum guaranteed speeds of a broadband provider's lowest service level, they simply say you can't get their service. Who's gonna make 'em try? And bus service? To your podunk neighborhood? Pfft.

The USPS, on the other hand, has not had the option to say "no we won't" on questions of providing their service, for all but the very most rural routes. Only the very least-populated ZIP codes, maybe a dozen people in hundreds of square miles of ranchland, have "office service only". Everyone else gets at least a community mailbox (though that's all USPS will do for new neighborhoods built after 2018), if not curbside or front-door service (grandfathered indefinitely where it exists).

That mandate to be able to deliver at least to the vicinity of every resident of the United States has remained, even as the volume of items to deliver has steadily dropped in favor of much lower-cost ways to transmit a message. Phone calls, and then e-mail, have made most uses of the age-old practice of hand-writing or even typing a letter obsolete. The USPS handled about 52 billion pieces of mail in 2020. Sounds like a lot, until you realize 129 billion emails were sent the same year, and about 2 trillion cell phone calls were made. The USPS, in an alternate universe where the Information Age never arrived, would have its hands full. As it is, the USPS still has to run the same routes to get what letters it does receive to their destinations, but it's getting far less money in stamp revenue to run those routes.

Imagine a bus service that was required by law to run routes with a stop at the front door of every single house in the United States. Every day. It might take a few days for you to get where you're going, and you might not be very comfortable on the way, but you'll arrive exactly where you needed to go in one piece. Then imagine that this service costs its participants fifty-five cents a ride. Then, say - with a straight face - that this service must turn a profit. Yeah, I couldn't do it either. That's the job of the United States Postal Service, and the expectation of its customer base. There are a lot of other reasons nobody else wants this job, but that should be sufficient for a free answer on an Internet site.

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