A New Twist

Packing Up

By Janean Chun

Ending a controversy that had mail and parcel franchises up in arms (see"Franchise News," October 1996), the U.S. Postal Service (USPS) recently announced it would discontinue its Pack and Send services.

Many franchisors and franchisees in the industry perceived the Pack and Send services, which offered many of the same products as mail and parcel stores at lower prices, as direct competition from a government agency. Yet it wasn't the outcry that halted the USPS' plans. "It was purely a legal issue," says Rachel Southworth, executive director of the Coalition Against Unfair USPS Competition. "The Postal Rate Commission [PRC] determined that Pack and Send is indeed a postal service, and if the USPS wants to offer the service, it has to go through the proper channels and submit a rate case, just as it does with postage stamps, money orders and everything else it offers. It was skirting the authority of the PRC."

Rather than file a rate case, the USPS decided to drop the service, which had been in the test stage. "There is no plan at this time to reinstate that product line," says Bil Paul of the USPS.

"We were pleased with the decision," says Southworth. "But we have to temper our enthusiasm with a dose of reality. If at any time the Postal Service decides it wants to offer Pack and Send again, it can simply take it to the PRC for a rate. It's that easy."

Because this possibility looms, the Coalition Against Unfair USPS Competition continues to pursue legislation limiting the Postal Service from providing any commercial services that it did not offer nationwide prior to January 1, 1994. The legislation "would take [the USPS] out of the business permanently," says Southworth. "[The recent announcement by the Postal Service] is a victory for now, but that doesn't necessarily mean it's over for good."

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This article was originally published in the May 1997 print edition of Entrepreneur with the headline: A New Twist.

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