“With this program, we’re able to provide consumers in every rural town or big city across America with … a convenient, free mail delivery system.” – John Agwunobi, Wal-Mart division president

In continuing my mental exercise on replacing the USPS I was stuck with solving the problem of delivery and drop-off for rural America.

Especially deep rural America – where the roads are still gravel.

A I commented on earlier – Wal-Mart’s based its success on serving rural America remarkably well.¹

With more than 4000 stores nationally, 3000 stores worldwide, and a highly efficient network of distribution centers – there are few organizations with the presence, passionate customer base, and logistics experience capable of competing with the USPS.

Even half a mile down a dirt road in rural Wisconsin – a Wal-Mart is still a quick 15 minute drive away. And has been for 15 years.

Let’s say Wal-Mart returned to the days of small town packaged good store.

As part of your weekly drive into town for clothes and groceries, you drop your outgoing mail – bills, personal correspondence, everything – off at the customer service desk.

For the personal correspondence – you provide an email address or phone number of the recipient and you go about your shopping.

Wal-Mart – in their characteristic price cutting manner – charges nothing for this service².

The outgoing mail is picked up by the existing incoming delivery trucks and their first stop is the nearest Wal-Mart distribution center. Where the mail is sorted for delivery to next closest Wal-Mart distribution center to the final destination². And so on, and so on, until it’s delivered to the Wal-Mart closest to the intended recipient.

Once at this last Wal-Mart – a email (or voicemail) is sent to the intended recipient notifying them that an item is ready for pick-up during regular business hours.

What else would that quote at the top of the post be about?

Oh, how Wal-Mart is transforming the prescription drugs market.

1. Yes, I’m aware my original question was about a competitive non-profit. I do think that’s an more interesting idea – but I landed on Wal-Mart. So let’s explore this for a moment.

2. Just like email.

Yesterday, NPR discussed the challenges of the US Postal Service after reporting a $3.8 billion revenue loss for the fiscal year ending September 30, 2009.

The revenue loss corresponded to a reported 13% decline in mail volume.

I’ve noticed a significant decrease on my end since Dec 2007 as well. For the 2008 and 2009 – the number of credit card offers and direct mail catalogs arriving daily was 0. This number is only now picking back up – maybe one per week. Nowhere near the multiple items per day we received in 2006 and 2007.

We’re even transporting Netflix DVDs less.

I have a hard-time imaging the USPS returning to profitability with first class stamps less than 50 cents a piece. Then again, none of the bulk mailings I mentioned above had first class stamps on them. So, either first class stamps are the USPS’s only profit – or they’re a loss leader.

My bet is the latter.

This puts the Postal Service in a tough spot. FedEx and UPS are taking the high end of their business. Email, Facebook, and 37Signals are taking the low end.

There are a few things we send via the USPS – things that aren’t easily digitized and not urgent enough to send via a private carrier:

1. ‘Thank you’ notes from the kids.
2. Holiday cards.

Leads me to some interesting questions:

Who else could handle that exchange?

What would a non-profit competitor to the USPS look like?
Even one that didn’t sell first class stamps or provide service to every address.

Or, restating the questions –

What would US Postal Service look like if it started today – with FedEx and the internet already well-established ?

Three ideas that immediately come to mind:

1. More sub-stations within other existing businesses.
2. Email/IM/voice mail notification of letter/package arrival.
3. Scheduled home pick-up.
4. Co-op business structure.

How would you change the USPS?