Now that the UK's Royal Mail shares are publicly available via the London Stock Exchange, many are wondering what would happen if the US Postal Service (USPS) were to make shares available via the New York Stock Exchange.
Why did Royal Mail go public? Undoubtedly, Royal Mail has been looking to the future of delivery services and recognizing that with the rise in Internet shopping, parcel delivery is, and will continue to be, critical to its survival and continued success. The boom in Internet shopping makes parcel delivery far more important to Royal Mail's business than the delivery of letters, a service that is shrinking.
In order to shift its focus to parcel, Royal Mail needs an influx of capital. Ill-equipped to handle the paradigm shift from majority mail services to majority parcel services (packages over one pound), private capital will be required in order for Royal Mail to grow and compete. The capital it should gain by going public could very well enable Royal Mail to fund its parcel initiative and keep up with the major parcel carriers. Royal Mail went public on October 15, 2013.
Why might the USPS consider going public? Though privatization alone would not resolve the USPS's current financial crisis, the USPS could benefit from private business entering into the mix. Allowing non-government companies to handle different components of the supply chain that handle both mail and parcels could very well help resolve many of the USPS's financial problems.
What might the USPS continue to handle independently? If it were to go public, the US government would almost certainly continue to regulate the USPS. The government would also likely enforce regulations on the USPS as well as on private organizations, particularly when it comes to delivery schedules. The USPS would likely be forced to adhere to certain contract guidelines, as would outside supply chain contractors. Post offices, postage and rates, service and delivery schedules, data and last-leg delivery would probably all remain regulated and controlled by the government.
Today, in the UK, Royal Mail holds and manages the infrastructure that moves both mail and parcel. Royal Mail owns and operates the equipment, personnel, and channels that sort, route and deliver items. It maintains boxes, sort buildings and drop-off facilities. However, no stamps are available for purchase at Royal Mail facilities, nor can the public purchase postage for mail or parcel. Mail and parcel drop-off, postage payment, PO boxes, banking, faxes, copies, stamp purchases, etc., must all be done at post office locations specifically dedicated to providing these services and items.
Though the USPS is not poised to go public, shippers should watch for alignments in public policies that would support such an effort so that they can anticipate both good and bad changes. While going public could potentially result in more service options and lower rates, it could also degrade shipping times and cause additional problems for shippers. In the UK, the shift to going public has resulted in a series of Communication Workers Union (CWU) strikes. The CWU's opposition to Crown post office closings, pay freezes, changes to worker pensions and other pay and labor contract issues are still slowing Royal Mail's progress and hampering shippers.
Several major steps would have to occur before the USPS could initiate a first-time sale of stocks or initial public offering (IPO). UK government and Royal Mail spent several years preparing to go public. They split up assets and defined the government rules required for going public to take place. The US government and USPS have yet to get these wheels in motion but still raise the question of, what if?
Why did Royal Mail go public? Undoubtedly, Royal Mail has been looking to the future of delivery services and recognizing that with the rise in Internet shopping, parcel delivery is, and will continue to be, critical to its survival and continued success. The boom in Internet shopping makes parcel delivery far more important to Royal Mail's business than the delivery of letters, a service that is shrinking.
In order to shift its focus to parcel, Royal Mail needs an influx of capital. Ill-equipped to handle the paradigm shift from majority mail services to majority parcel services (packages over one pound), private capital will be required in order for Royal Mail to grow and compete. The capital it should gain by going public could very well enable Royal Mail to fund its parcel initiative and keep up with the major parcel carriers. Royal Mail went public on October 15, 2013.
Why might the USPS consider going public? Though privatization alone would not resolve the USPS's current financial crisis, the USPS could benefit from private business entering into the mix. Allowing non-government companies to handle different components of the supply chain that handle both mail and parcels could very well help resolve many of the USPS's financial problems.
What might the USPS continue to handle independently? If it were to go public, the US government would almost certainly continue to regulate the USPS. The government would also likely enforce regulations on the USPS as well as on private organizations, particularly when it comes to delivery schedules. The USPS would likely be forced to adhere to certain contract guidelines, as would outside supply chain contractors. Post offices, postage and rates, service and delivery schedules, data and last-leg delivery would probably all remain regulated and controlled by the government.
Today, in the UK, Royal Mail holds and manages the infrastructure that moves both mail and parcel. Royal Mail owns and operates the equipment, personnel, and channels that sort, route and deliver items. It maintains boxes, sort buildings and drop-off facilities. However, no stamps are available for purchase at Royal Mail facilities, nor can the public purchase postage for mail or parcel. Mail and parcel drop-off, postage payment, PO boxes, banking, faxes, copies, stamp purchases, etc., must all be done at post office locations specifically dedicated to providing these services and items.
Though the USPS is not poised to go public, shippers should watch for alignments in public policies that would support such an effort so that they can anticipate both good and bad changes. While going public could potentially result in more service options and lower rates, it could also degrade shipping times and cause additional problems for shippers. In the UK, the shift to going public has resulted in a series of Communication Workers Union (CWU) strikes. The CWU's opposition to Crown post office closings, pay freezes, changes to worker pensions and other pay and labor contract issues are still slowing Royal Mail's progress and hampering shippers.
Several major steps would have to occur before the USPS could initiate a first-time sale of stocks or initial public offering (IPO). UK government and Royal Mail spent several years preparing to go public. They split up assets and defined the government rules required for going public to take place. The US government and USPS have yet to get these wheels in motion but still raise the question of, what if?
