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How Would You Make Over the U.S. Postal Service?

With bankruptcy looming, the U.S. post office needs a major fix. We asked Inc. 500 CEOs how they would approach the problem

Jeffrey Coolidge/Getty

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Everyone agrees that the U.S. Postal Service could do better. With bankruptcy looming, there's a consensus that big changes need to happen, most involving cutting staff and scaling back services. But what if we could unleash the creative ingenuity of entrepreneurs to improve the post office? We asked Inc. 500 CEOs how they would approach the problem. Here are some of their responses.

The USPS needs a digital mail system. Your physical address could become your username, with the post office allowing you to turn off physical delivery of mail, like banks have done with bank statements. Recipients could choose to have their physical mail delivered to their home mailboxes for archiving once a month. By creating and owning the digital postal service market, the USPS could greatly reduce costs and become profitable, useful, and relevant for the next 100 years.

Aaron Houghton
Chairman and co-founder, iContact
Durham, North Carolina

The mail carrier could do pickups and charge a monthly pickup fee, just like FedEx and UPS, while keeping the letterbox as a free service. Simply adding a $25 monthly fee for businesses that want a daily mail pickup would be something that many businesses would jump on. If you had even 20 percent of the small-business market, you could generate an extra $60 million a year. If the USPS also cut retiree benefits by 40 percent and operating costs by 10 percent, along with raising rates by 5 percent, it could turn a $7 billion loss into a $4 billion profit.

Sandeep Walia
CEO, Ignify
Cerritos, California

Raise the rates on first-class mail. It is the postal service's core, and it has a monopoly to deliver it. This system actually works and is the most profitable part of the USPS. When the USPS's first-class rates are compared with those in other industrialized countries, though, they are grossly underpriced. A similar-size letter mailed in the U.K. costs 65 cents versus 44 cents with the USPS; in Germany, it costs 78 cents. Using 2008 statistics, each one-penny increase in the first-class mail rate would add over $900 million in revenue. If you raise it by 5 cents, you add another $4.5 billion.

Harry Geller
CEO, SoDel Concepts
Bethany Beach, Delaware

When it comes to shipping small packages, the USPS is cheaper than its competitors and offers comparable and sometimes even faster delivery times. However, since it doesn't offer reliable tracking, we pay a premium to ship most of our packages with UPS. If the USPS tracked packages as well as UPS, it could capture a lot of business.

Sean Harper
Co-founder, TSS-Radio
Chicago

The USPS is an out-of-date concept. I don't think my 18-year-old son has ever written a letter. For him, the post office is about as relevant as cassette tapes, rotary phones, and broadcast television. The USPS doesn't need to be fixed -- it needs to be sold off.

Tony Paquin
CEO, Paquin Healthcare Companies
Celebration, Florida

Last updated: Oct 1, 2009

DARREN DAHL

Darren Dahl is a contributing editor at Inc. magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, North Carolina.




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