Postal services carve out their on-line role

The start of the e-mail explosion prompted a now-familiar prediction: that the new messaging technology would quickly kill off any need for old-fashioned postal mail. But just as radio didn’t knock out newspapers and television didn’t replace radio, people still send “snail mail” in hefty volumes.

Nonetheless, most postal services, including the U.S. Postal Service (USPS) and Canada Post, are accepting that the Web will soon absorb large chunks of their mail service.

“We just have to be smart to understand what our consumers want, what the technology can offer,” said John Nolan, deputy postmaster general of the USPS in Washington, D.C. “In that sense, we’re ready for the Internet to be a disruptive technology and completely disrupt our normal volumes. How much and to what extent remain to be seen. But it’s also a supportive technology; we see tremendous opportunities in being able to reach more customers in a much richer fashion through the Internet.”

In order to grab a slice of the e-business pie, postal services will not only have to create and offer useful on-line services that make existing postal services simpler or more convenient, but also make consumers aware of the new Web capabilities.

“[Right now], if I want an encrypted e-mail service, I’ll go to an encrypted e-mail company. It’s not my first thought to go to the post office for that kind of service,” said Eric Arnum, editor of Messaging On-line Inc. in New York.

Changing the image of the USPS from that of a traditional, stodgy government institution to an e-services player will be a feat similar to moving a brick-and-mortar store on-line, but on a much larger scale.

“The role of the post office [currently] is as trusted third party with an unparalleled workforce and physical locations,” Arnum added. “Who else can claim so many countertops and employees, and the trust of virtually every merchant in the country with their money, with their bills, with everything?”

Preparing for an electronic future

During the next four to five years, both the USPS and Canada Post expect to see letter mail volume drop significantly as on-line bill presentment and payment, as well as services such as targeted bulk mail and e-cards, gain customer interest.

“We’re working basically to keep two streams alive. One is the hard copy, which is our industry now. But we’re also looking into the future, which is going to be e-commerce, and we’re looking to be big in parcel distribution because of on-line purchases,” said John Caines, national manager of media relations at Canada Post in Ottawa.

To help make the on-line leap, Canada Post offers a free electronic post office box to users through, where customers can securely receive mail from senders they have previously selected.

The program was originally set up for on-line bill presentment and payment, but has been expanded due to the potential for targeted advertising. Customers can now choose from among 50 to 100 suppliers and determine exactly which companies’ advertising they want to receive. Currently, the program has about 100,000 participants, Caines added.

In addition, Canada Post has launched eParcel and eStores. A Web-based application developed in-house, eParcel can be integrated into a retailer’s site to offer consumers delivery options; eStores, an on-line application, creates a virtual storefront merging postal technology with a virtual mall of about 400 Canadian retailers.

Both Canada Post and the USPS are involved with PosteCS, a secure message delivery and tracking service launched in April 2000 and also supported by France’s La Poste. USPS also partnered with CheckFree to create eBillPay, an e-billing service, in April 2000. In addition, the USPS offers an electronic postmark that time and date ‘stamps’ an electronic document or file and alerts a user to tampering.

“The other thing the Internet and overall technology are enabling us to do, quite honestly, is streamline our internal costs, and that’s a big deal,” Nolan said. “We’re using the Internet just like a lot of companies to try and drive down costs administratively and then leverage that infrastructure to enhance our core products and offer Internet-related products outside our mainstream.”

The USPS also has some services in the works sparked by consumer demand, including a central site to submit change-of-address information and to select which companies, such as a magazine or insurance firm, should automatically receive the updated address; and the USPS’ own secure e-mailbox program. Analysts note, however, that the USPS’ large size will likely slow implementation of any Internet plan, despite recent increases in flexibility.

Banking on tradition

Some analysts would like to see the USPS extend its reach and range of services for the Internet age. Arnum, for one, views the USPS as a perfect institution to handle the issuing of digital certificates and money transfers.

“Why do I have to get a money order and mail it to someone? Why can’t I go into a post office and give them $20 and have [the recipient] go into his or her post office and get it, cut out the paper middleman?” Arnum asks. “Unfortunately, they would be competing with Western Union and PayPal, but again, you just can’t beat them for physical presence.”

As they move on-line, postal services will face the problem of differentiating themselves from third-party companies offering similar services. But national postal services are banking on their histories and the long-standing trust in their services to keep their ventures afloat.

“There’s no doubt, if you want to be successful on the Internet, that aligning yourself with the postal service probably isn’t a bad idea. We hope to play that trump card an awful lot,” Nolan said.

Canada Post’s Caines agrees, noting that “with the postal service, there’s a sanctity of the mail. People feel very secure when they put something in the system that it won’t be opened until it gets to the addressee; we offer that same kind of security and sanctity through an electronic post office box.”

USPS hits the Web

Although they handle more than 200 billion pieces of physical mail a year, the USPS is looking to increase their on-line presence and make electronic mail and services a bigger piece of their future. took a .com address rather than .gov to increase hits; it currently receives about 3 million visits per month.

The Stamps On-line program generated US$12 million in stamp sales on the Web during the first six months of 2000.

An electronic addressing program is in the works, which would allow users to request a unique and permanent electronic address that would link to a physical address in the USPS directory.

The USPS is one of the largest investors in optical character reader technology, and new automation technology will allow 80 per cent of handwritten letters to be computer “read” by the end of 2001.