Life in the Slow Lane

Money and market share are two things the USPS is losing its grip on. Ready to step in?
Magazine Contributor
3 min read

This story appears in the March 2002 issue of Entrepreneur. Subscribe »

The organization is cutting staff furiously, lost more than $1.5 billion in 2001 alone and has run up $11 billion in debt. A dying dotcom? No--it's the U.S. Postal Service. Now, with the addition of anthrax to its woes, snail mail could slide into long-term decline, opening the door for entrepreneurs to offer alternatives.

With businesses increasingly using the Internet for external communications, need for the USPS' services is decreasing. The growing popularity of e-newsletters, for instance, is eating into traditional newsletter delivery. "The postal service can't compete in the newsletter market, since newsletter information has to be timely and sent out quickly," says Bill Densmore, founder of Clickshare Service Corp., a Williamstown, Massachusetts, developer of e-newsletter distribution platforms.

Several small private-delivery courier services have sprung up in the past five years to do battle with the postal service's Priority Mail service. And while customers will probably never accept reading magazines and catalogs solely online, some business experts suggest that, if the USPS fades into oblivion, businesses could make money providing specific magazine- and catalog-delivery services.

Perhaps the most exciting development among USPS alternatives is the potential for online banking and bill payment., a small online banking service in Wilmington, Delaware, tailors banking services to certain professions; for instance, it created, a bank for artists. And several small companies offering online bill payment already are reaching a critical mass of consumers.

"Anthrax is a catalyst leading people to rethink what we need most aspects of snail mail for," says Steven Schneider, an Internet and postal service expert at State University of New York Institute of Technology in Utica-Rome, New York. "Online bill payment will be one of the biggest beneficiaries of this shift." Indeed, E-Com Technologies Corp., a Vancouver, British Columbia, online bill payment company, says its online mortgage bill business has risen by as much as 25 percent since the anthrax scare.

The USPS offers limited online services, including online bill payment, but they haven't proved to be very popular. And while the USPS has discussed expanding its online services dramatically, it hasn't done so, and is not really a competitor in the online services market.

For small companies competing with the USPS, the going remains tough. But these companies have been emboldened by one key statistic: Leading research group IDC estimates that the number of e-mailboxes worldwide will grow by more than 130 percent in the next five years.

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