U.S.Postal Service--monopoly? and other questions

I have a few questions about our very old, very rich U.S. postal service. I read recently that the USPS is NOT a goverment agency, but a private enterprise, and made 63 billion in revenue last year. Since they have virtually no competitors and are a private enterprise, why are they not considered a monopoly? (Eat your heart out Bill Gates). Also, is it true that as a business, they qualify for tax exemption? Also, if they are not a government agency why do they need employees to pass a civil service test? and why do they tend to hire people who have worked for or served the government? If they are tied to the government somehow why isn’t the government using some of the profits of this so called “private enterprise” to pay off the national debt?

Thanks for any info.

I thought the USPS was federal Gov, but I might be wrong…

I woudnt call them a monoploy, UPS, Fed Ex, there are other companies you can use to send letters and packages.

The USPS has a monopoly on regular mail. If a letter is urgent, it can be sent via FedEx or UPS. Packages can be sent by anyone. But a standard letter must be sent USPS.

The United States Postal Service was formed by Public Law 91-375. It is an independent establishment of the executive branch of the U.S. Govenment. The best way to think of it is a corporation which is completly owned by the U.S. Government.

Nine out of the 11 Board of Governors of the USPS are appointed by the President with the consent of the Senate. They appoint a Postmaster General and that group of ten select a Deputy Postmaster General.

With the exception of overnight mail delivery they are a monopoly. I’m not sure of their revenue numbers, but as a business they just about broke even. They do not pay taxes and have not recieved subsidies from the Federal Government since 1983.

There is an Independent Postal Rate Commission (5 members) appointed by the President that recommends any change to postal rates or classifications.

Ah yes, the USPS. It is a private corporation with special priviliges endowed on it by its patron, the US Government. For example, only the USPS can legally handle first-class mail (the average letter to grandma). USPS mail workers are pretty much exempt from tresspass laws while on the job (yes, the mailman can cut across your lawn if he feels like it, and you can’t stop him). Only the USPS can legally use mailboxes. Hell, the USPS even has its own mail police to put the squeeze on the competition. It does all that while turning a huge profit, not to mention avoiding the DoJ and their anti-commerce posse. No, none of this is fair. But since when was anything to do with life fair?


Um, no, sorry, it is not a private enterprise. It is a federal agency, but one that operates independently, is self-supporting, and receives no tax subsidies. So all hail the $63 billion budget!


Um, they do have competitors. UPS? FedEx? Mailboxes Etc.?

It’s my understanding that a government agency cannot be considered a monopoly, because they aren’t there to make a profit, they’re there to serve the People of the United States.

They ARE a government agency. The Civil Service exams for letter carriers and mail handlers are on things like “how good are you at memorizing addresses.”

Post Office exams–what’s involved.
They tend to hire people who have already worked for other federal agencies because of something called “buyouts”.


It’s semi-government, in that it’s supposedly autonomous. There is no “owner” nor “stockholders.” The title would belong to the U.S. Goverment.

However, it runs on 100% non-appropriated funds, which means we don’t pay tax dollars to make the post office work. Note: I don’t know how their retirement system works – it may very well be appropriated funds.

Dang. I’ll be back in a minute with the rest of that…


I am sure that you can use UPS or fed ex to send a letter – it may be snigifiantly more expensive, but its still up to you…

Cool how we all got a word in here within 5 minutes’ time…

UPS & FedEx rivals have long been trying to dig into the USPS monopoly, however the current laws allow for some antitrust exceptions to be permitted with respect to the way that the USPS is required to follow both state & federal regulations & pay their taxes. Currently, only the post office is allowed to deliver first-class mail, a monopoly that has existed since the founding of the country. Agency officials have long insisted they need this protection in order to maintain a national service that reaches every American at the same price.

About a year ago, Robert Cohen spoke before the HR Subcommittee On The Postal Service thusly:

And Freddie Smith, CEO FDX Corp (parent of FedEx):

Okay, Emily Latella voice. [never mind]

Buyouts wasn’t what I was thinking of, so it’s probably just as well I cut myself off halfway there. The Better Half is already asleep, so I’ll try to remember to ask him in the morning.

Dang. :mad:

I forgot which Important Revolutionary-Type Nation-Founding Document it is, but I remember from history class that somewhere in one of them (Constitution?) the government must deliver the mail. I remember being told that the intellectuals who wrote The Document were always complaining about the poor mail service in the Confederacy, etc.

Of course, I’m too lazy to actually look this up, but maybe someone that has had some caffeine will do us a favor :slight_smile:

Ah, the Better Half is timely as usual. The reason, he says, why they can never get rid of the Post Office is because it’s written right into the Constitution. And the reason why it’s written right into the Constitution is because Benjamin Franklin was the first U.S. Postmaster. And, he adds, Old Ben was also the postmaster for the American colonies, pre-1776. He says it was a political appointment that Mother England handed out, and Franklin just hung onto it.

He also points out that up until the passage of the Hatch Act in the 1920s, all U.S. postmasters were political appointees.

Re buyouts: What I was remembering was that when you quit a federal job, you got a kind of severance pay called a buyout. Then if you wanted to get hired on at another federal job, you had to pay the money back. However, there’s a big exception for the Post Office.

What I was remembering the exception as, however, was wrong. I was remembering it as if you got hired on at the Post Office, you didn’t have to pay the money back. But my tour of the buyouts link reminded me that it’s actually just the opposite.


If you have some kind of irreplaceable skill, your potential boss at whatever federal agency you’ve got your eye on can apply to the OPM for a waiver, so you won’t have to pay back the buyout. However, the exception for the Post Office is that since they’re a completely separate branch of the government, they cannot apply for a waiver on your buyout payback.

So I asked the Better Half about the policy of giving hiring preference to former federal employees. He was surprised, “What former federal employees? They never quit!” Then he said, no, actually as far as he knows (and he’s the Workman’s Comp representative for the local union), there’s no official policy dictating hiring preference for other federal employees. He says they do give preference to veterans–they give you 5 points on the exam if you’re a vet, and 10 points if you’re a disabled vet.

It does all that while turning a huge profit

Actually, I believe it barely breaks even.

About 12 years ago the power company here in NC decided to see if they could save money by delivering the power bills without mailing them. They put the bill in a bag and hung it on your front doorknob. They found out it was not cheaper. This was legal but I think there were some questions about it. I guess since they were delivering their own material and not stuff for other people it was OK.

Don’t know about USPS, but I can report on the Canadian end of things. Canada Post used to be a full federal government concern, but was “semi-privatized” some years back. It still has government protection, and is known as a “crown corporation” I think.

The protection in question is mainly the maintenance of a monopoly, which is done with a law which states that anyone competing with Canada Post must charge the customer at least three times as much. Simple as that!

So all coutiers therefore charge accordingly. With one or two exceptions. There is at least one downtown Toronto courier operating illegally. They do same-day small package delivery to and from various boxes for a cost similar to a first class letter.

Section 8 of the US Constitution: Congress shall have the power to establish Post Offices and Post Roads.

This is an exclusive right. Hence the postal service must be under the regulation and control of Congress, I assume, as they alone have the power to establish it. Private companies cannot establish post offices and “post roads.” If I’m wrong, I’d like to hear the reason.


DuckDuckGoose, I was going to ask you this is E-mail but you don’t have you address listed. What branch does your husband work for? My father is part of Branch 36 NYC

Actually, it’s not allowed to make a profit, and it works hard as hell to make sure it breaks even without making a profit. Lot harder than you think. I used to be a contractor at their HQ in DC so I had all this explained to me.