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WASHINGTON'S DINOSAURS.(ISSUES & INSIGHTS)(EDITORIALS)
The FedEx shipments of U.S. Postal Service packages proceeded quietly, which is the way most commerce works. We've heard no one say it, but the deal implies that the government can't deliver the mail as well as the private sector.
The seven-year, $7.2 billion contract between FedEx and the Postal Service began Thursday. Under the deal, FedEx ultimately will transport up to 3.3 million pounds of mail each day.
Postal Service officials expect the partnership will save more than $1 billion in air transport costs. Given that the Postal Service was expected to lose $2 billion to $3 billion next year -- even though it has a government-guarded monopoly on regular mail delivery -- the savings are real.
Will full privatization follow? If so, we'll say right now the effort is a success. New Zealand began privatizing its lousy mail system in 1987. Yearly profits in the tens of millions have followed. Yes, profits.
Rates hikes haven't. It costs the same to mail a letter in New Zealand today ($0.40 N.Z.) as it did when the process was begun.
The U.S. system, though, has roughly three money-losing years for each year it makes a profit. Meanwhile, the cost of a stamp has soared from 8 cents in 1973 to 43 cents today. And how often does anyone rave about the good ...
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