USPS: Last Post Standing

The Japanese government announced yesterday that it will begin the process of privatizing Japan Post.  (See: Business Week)  The decision by the Japanese government leaves the United States Postal Service alone as having a business model with many characteristics of a government department.

The following chart illustrates where many of these posts sit on a continuum from government department to a corporation with only private shareholders.     Postal Operators operating as a government department, in a manner similar to the pre-Postal Reorganization Act Post Office would be placed on the far left side of the chart.   A national post with only private sector shareholders would be placed on the far right side. National posts located between the center and the far right sides of the chart all operate as government owned or partially government owned corporations operating under standard or nearly standard corporate, employment, and tax law. 
 

Once Japanese government sells shares in the its national post to the public, this chart will look particularly unbalanced.  All other posts will fall somewhere between the center and the fully privatized side of the chart.   In the instances of the Swedish, Danish, and Belgium posts, the current positions will likely shift toward privatization once they begin selling shares to the public.

The shift toward privately owned national posts are happening in countries with governments that are considered both left and right of center.   The decision Swedish and Danish governments to begin privatizing their posts reflect concerns that the national operators cannot raise sufficient capital from private debt markets alone to cover capital needs to manage the transition to a business model that is less reliant on document delivery.

In the near term, privatization appears unlikely in Australia, Canada, Finland, France, and New Zealand.  In these countries, cultural norms allow government owned corporation, operating under commercial business, employment, and tax laws to fully or nearly fully compete with the private sector.  In some of these countries, privatization would be politically unpopular.  In others, there is no political drive to privatize the national post and postal management has not expressed a need for the capital that selling shares would provide.

Privatization is off the table for the Postal Service until its finances improve.   This chart illustrates that privatization is unlikely to remain off the table for ever.