USPS

I wass in the post office in the past days mailing stuffs. The experience was very unpleasant. The staffs are in general are friendly, but the waiting time is long. The reason, under economic theory, is simple. They charge too cheap. Why not charge higher to lower the quantity demand? The clear answer is the role of the state owned company is to service the community, not profit maximizing. That is also why the USPS keeps losing money and need the federal subsidies year over year.

The post office has been using some strategies to solve this problem. For example, they make the online postal service that we can purchase stamp or mail our packages on line. They also create the priority mail, flat rate priority mail, global priority mail, express mail, etc. The problem for the online service is that it is quite difficult to know how much the service cost, which depends on the package weight, size, and destination. This makes consumers give up the online service. The problem of other types of service mentioned above is that they only affect the delivery time, but not waiting time for the customers.

Here is a proposal. I suggest the post office creates an express line for anyone, by charging a higher price for postal service. At the same time, the current service continues as usual so the poor will still be taken care of. In the express line, I don't know how much they should charge, but should be govern by the invisble hand. They can charge $1 extra per letter/package first and see if it is the equilibrium and adjust accordingly. Furthermore, each post office should determine its own express line charge depending on the local demand and supply. Of course, the regular line which charges the same as today remains unchanged.

Some post office may actually charge less than the regular price. In that case, the regular is basically deadd. But I doublt there are not many of those post offices in the country.

In this proposal, both the poor, who usually has a relatively low time value, will continue to be served. At the same time, others with high time value, who are willing to pay a higher price, are happy to go to the express line. Absolutely, the dead-weigh loss will be smaller than the current setting.

Now, what are the incentive for each post office to search for the equilibrium price. I would suggest part or all the extra money the post office obtained will be allocated back to that post office (If it turns out losing money, they can return to the current setting). The extra money can be used in upgrading the equipment, hiring more mailman, etc. This at least generates some competition among different post offices.

hopefully, we are not going to wait another hour in the post office for a package again in the future.