Economics

In support of the Postal Service’s new clothing line

Image Credit: Donald Lee Pardue (Flickr) (CC BY 2.0)

Image Credit: Donald Lee Pardue (Flickr) (CC BY 2.0)

The announcement by the US Postal Service that it is starting a new all-weather line of clothing called “Rain Heat & Snow” has raised more than a few eyebrows. After all, the clothing business is extremely competitive, and there’s little evidence that shoppers are clamoring for postal uniforms.

But there is a serious subtext to such developments. The Postal Service is on the ropes. Its signature and most profitable service – the delivery of first-class letter mail – is down by over one-third. It lost $16 billion in 2012, and has maxed out its credit line of $15 billion with the US Treasury. It’s losing over $25 million each day, and has vast overhead in the form of the delivery network required to deliver mail six days a week.

The only alternative to having the Postal Service slowly disappear is to give it the commercial freedom to innovate, to explore new markets, and new product offerings. This is all in the hope of using its existing assets more effectively to raise additional revenue.

After decades as a government-owned firm with two legally enforced monopolies, the USPS will have to climb a steep learning curve to survive in a new, competitive marketplace. Unless taxpayers want to write a check for a major postal bailout, then they should applaud the USPS trying out new business ideas. Let the climb begin.

2 thoughts on “In support of the Postal Service’s new clothing line

  1. I am sorry but this effort at business diversity is pathetic at best. Someone needs to explain why any effort is being made by USPS managers to overcome a $16 billion dollar loss through a clothing line that will surely cost more to market through department and big box stores than will be available at margin. I am appalled that we have such small minds in charge of such a large organization. But the Chinese will like the idea.

  2. What a great idea! For my next anniversary, I’ll give my wife a gift certificate to go shopping at the Post Office. When I get out of the hospital I’ll go the usual dinner/chocolates/flowers/jewelry route. I think the Post Office should start selling tickets for Amtrak – they have much in common. Both are dirty and staffed by people whose main people skill is being surly. I wonder if anyone at the Post Offices can spell “M-a-r-k-d-o-w-n-s?”

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