The Inevitable Demise of the Postal Service

Michael Vizard

If the folks at Zumbox have their way, the postal service as we know it will soon be obsolete.

Zumbox has created the digital equivalent of a postal service that is mapped to every street address in the country. When a household signs up for the Zumbox service, all the monthly billing statements that the address receives are converted into a digital format. The customer then receives an e-mail notification each time there is a new bill and all the monthly bills are archived in a searchable repository that customers can examine and print out in case of a billing dispute or they need a paper receipt for tax purposes.

Zumbox CEO John Payne says the service works in partnership with all the clearinghouses that send bills each month to millions of households. When one of those services detects that a bill is going to be sent to an address in the Zumbox service, Zumbox software routes that bill over to Zumbox rather than create a paper copy that needs to be physically mailed.

From a business perspective, the savings could be massive because companies spend millions of dollars sending bills using first-class postage. In fact, if the volume of those first-class letters were to drop substantially, it's unlikely that the already financially troubled postal service would be economically viable. Postal services basically rely on the margins from first class mail to subsidize a variety of postal rates. Without enough first-class mail, rates for other classes of mail would have to rise to the point where the companies that use those services would find other means to deliver products and messages, such as using an alternative carrier or stuffing more fliers in your local newspaper.

Payne argues that Zumbox also make it possible to gather useful demographic information without intruding on the privacy of individuals, and notes that companies can still include special digital offers with their electronic bills.

A massive shift to electronic billing has been on the environmental agenda for years. But finding a practical way to do it that doesn't require people to log in to 20 different sites to pay their bills has been a problem. Now if all the electronic bills are centralized, not only do we save massive amounts of money on paper, we reduce the amount of carbon that is generated simply to deliver the mail.

Of course, the folks in Washington, D.C., for any number of political reasons might have something to say about the demise of the postal service. But if we're really serious about cutting the cost of government while improving the overall state of the environment, then with the rise of e-mail and the advent of electronic billing you have to ask yourself whether the postal service as we know it today really has enough meaningful function to warrant its continued existence. Even Ben Franklin, founder of the U.S. Postal Service, would have a tough time coming up with an answer to that one.

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Feb 25, 2011 5:35 AM Ann All Ann All  says:

Hmmm. Paper bills? I would think the volume of those sent through snail mail has already decreased. What card issuer or local utility hasn't already converted a chunk of their customers to e-billing? I guess it's more convenient to centralize them. But not only do I no longer receive bills in the mail, in most cases I've already set up automatic withdrawals/payments.

Feb 26, 2011 9:55 AM John John  says: in response to Ann All

I agree.  Not sure I understand how I'd start to get all my bills in one place.  Zumbox has a LONG way to go before replacing the USPS.  Think about how incredible the USPS is.  They can get a letter pretty much anywhere in the country within 3-5 days with a high rate of success.  I think they get a bad rap.  What else can you get for $.45 that delivers like that?  Also - I know there are other services out there now for getting bill electronically - - - not sure it has to be tied to my address.  can't the biller just send me my bill?

Confused . . .

Feb 28, 2011 12:30 PM Mike Blaszczak Mike Blaszczak  says: in response to John

I also am confused, I pay nothing for someone to send me my bills through the Postal mail. I'm assuming that Zumbox is charging a fee for this service? How is this good for me, the consumer?


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