Lance Armstrong touched the hearts of people all over the world when he took his victory laps on the Champs Élysées after winning the famed Tour de France bicycle race last summer. Just three years ago, Lance was diagnosed with cancer. It looked as if he might not live.
Incredibly, Lance Armstrong conquered his cancer. He then conquered the field of international bicycling’s best to become only the second American to win the prestigious race.
Along for the ride and for the glory was the U.S. Postal Service, which considers itself as much of a winner as Lance. In a veritable orgy of corporate sponsorship, with Volkswagen, Yahoo.com, VISA, and Bank of America (among many others) bankrolling Lance Armstrong, the USPS emerged as the chief sponsor of Armstrong’s cycling team.
In fact, the team is named specifically for the USPS. Lance wore shirts and caps emblazoned with the familiar postal service logo. He took a congratulatory phone call from Postmaster General Bill Henderson after winning in France, not to mention calls from the president and from presidential candidate George W. Bush.
What on earth is an agency of the U.S. federal government, which operates with a protected monopoly when it comes to first-class mail delivery, doing with its own high-maintenance bicycle team racing in France?
Shielded from competition through monopoly
There is something unseemly about the postal service’s promoting competition on the roads of France when it is shielded from competition back home by federal edict. (There is also something ridiculous, a friend pointed out to me, about the USPS’s getting involved in an activity involving speed.)
Norm Schestrom, a postal service spokesman, insists, “We are in a highly competitive arena in all our products and services.” Even when it comes to first-class mail, he argues. Bill statements and payments make up a large chunk of first-class mail delivery. But email, the Internet, and electronic banking are allowing consumers to bypass the postal service entirely. Every time a credit card bill is paid online, the USPS loses a sale it thought the law had guaranteed. And it is worried.
“Now we are under competition from electronic banking and bill paying,” says Schestrom. “It is the most intense competitive pressure we’ve ever seen.”
But there isn’t really competition for first-class mail delivery. If you or I started a business promising customers we could deliver their mail more quickly and more cheaply than the government, we would go to jail. The “competition” which worries the postal service is the progress and promise of silicon.
The technological revolution
The postal service and its politically protected monopoly simply are being outpaced by the advances of an astounding technological revolution. It is as if the government had granted itself a monopoly on the production of buggy whips a century ago.
This revolution is overthrowing old ways of doing business, introducing wonderful innovations and efficiencies that improve our standard of living. Can anyone – except the postmaster general – argue that email hasn’t made our lives better?
As the pace of progress threatens to make the postal service obsolete, the men in blue are doing their best to convince the public they are still relevant. The USPS will spend $254 million dollars this year on advertising, both at home and abroad. It refuses to disclose how much money it spends on the U.S. Postal Service Pro Cycling team but insists the amount is a minuscule percentage of that quarter-billion dollar figure.
Does a monopoly need publicity?
Lance Armstrong’s success appears to have reaped great rewards for the postal service’s international publicity campaign. “We got coverage around the world,” says Schestrom. “In terms of what we got out of it, this was the media buy of the century!”
So it paid off. But what if Armstrong & Co. hadn’t won? Would it have been money well spent? Should the postal service even be advertising anyway?
Two things bear mentioning. The USPS recently announced that three-quarters of the way into its fiscal year, it is $1 billion dollars in the black. This comes on the heels of a 3 percent increase in the price of first-class mail in January 1999, jumping the cost of mailing a letter to 33 cents.
What would Ben Franklin say? As America’s first postmaster general, Franklin had a hand in creating the system we have today. But would he cotton to the idea of his agency’s using the gravy from its protected monopoly to subsidize professional athletes in foreign countries? Doubtful.
This article originally appeared on the Competitive Enterprise Institute’s UpDate magazine. Reprinted with permission.