E-Commerce Drains Billions of Letters from Post Office - Page 2

But the U.S. Postal Service has now reversed that slump, with its 2003 package numbers pushed back up to 1.13 billion and the newly released 2004 numbers showing roughly the same figures for this year.

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Harrington said the leveling off appears to be for two reasons. First, the Post Office has consistently offered package shipment services that are much lower cost than private rivals offerings. With businesses and consumers cutting back, cost is a key issue.

Secondly, at least one small corner of e-commerce has been very friendly to the Post Office: eBay. Not only does eBay prominently push the post office as a shipment option, Harrington said, but its creating package opportunities that simply didnt exist before.

"The Internet has opened up new opportunities to us," he said. "These eBay sales, before they would have happened at a yard sale, a collectors convention, some sort of venue like that where package shipping of any kind wasnt needed."

In a clear win for the post office, bulk business mail (often affectionately known as junk mail) has been soaring in popularity recently, despite initial fears that the much cheaper spam would hurt it.

After a sharp drop from 2000 (90.1 billion pieces) to 2002 (87.2 billion pieces), its picked up dramatically, hitting 90.4 billion pieces in 2003 and 95.6 billion pieces in 2004. The one-year 5.1 billion reported increase for 2004 far exceeded even the postal services internal projection, which predicted an increase of only 3.9 billion pieces.

Harrington attributes the bulk business increases to postal rates having remained stable "for one of the longest periods" in postal history, adding that SPAM has proven much less effective than bulk snail mail. Also, he noted that bulk business mail also includes a lot of requested documents, such as catalogues.

Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.

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