I'm confused as well. I thought the reason why mailing a letter through UPS is expensive is because using a system set up for delivery of packages to deliver a letter is a bit wasteful and thus they have to set higher costs to make any money on letters.
"FedEx and United Parcel Service (UPS) directly compete with USPS express mail and package delivery services, making nationwide deliveries of urgent letters and packages. Due to the postal monopoly, they are not allowed to deliver non-urgent letters and may not directly ship to U.S. Mail boxes at residential and commercial destinations."
I don't know what specifically the definitions of urgent and non-urgent are, but you get the idea. UPS may not now be designed to deliver non-urgent letters efficiently, but that's largely because they aren't allowed to, so why would they bother?
(Not strictly a reply to you, but following up since I found that interesting.)
The original quote was
> that, simply, is why mailing a letter through UPS is so expensive.
So the actual reason is: Mailing a letter through UPS does not exist. Mailing an express letter does exist and it is more expensive.
And I think they wouldn't bother either way, simply because it's not economical for them. Once again a reason why having it as a quasi-government service makes sense.
And I think they wouldn't bother either way, simply because it's not economical for them. Once again a reason why having it as a quasi-government service makes sense.
If nobody was in that market at all and there was no legal barrier to entering the market, it would be economical for somebody to offer the service, be that UPS or some other company.
Not economical to the customer. . .I don't think private companies would necessarily find it economical to deliver letters to very sparsely populated rural areas - at least not using current technology. And I don't think it would be worth it to them to invest in researching more advanced technology that would make it more economical to the company. The potential customer base would be too small to yield a decent of rate of return on the investment, let alone the expected actual customer base. Look at other areas where nobody is in the market and there are no legal barriers to entering the market and there are still geographic regions without service providers. . .mass transit, retail. . .
True, but it would still be debatable to what extend the service would be as useful as the USPS if it was "economical". Today, though, it is more likely to be somewhat decent, so that is debatable as well, but not so when the postal system was first put in place.
And by the way: My perspective is that of living in Germany and having actually worked for two years as a postman for Deutsche Post after it was privatized and the monopoly was abandoned. I think it is highly debatable whether we're better off with the "free market" (also a debatable term in this case) solution right now. I was employed as a help because they needed more capacity to deliver advertising, which is - by volume - what they mostly deliver these days.
