Once upon a time the United States Postal Service had a monopoly on shipping parcels.
In 1852, the combination of high rates and unmotivated politically appointed postmasters opened the door for Wells Fargo to become the first real competition to shipping small packages. While there were other companies attempting to gain some market share, Well Fargo’s ability to ship gold securely, utilizing their stagecoach infrastructure, allowed the company to offer express shipping services for non-gold products. After the collapse of their rival Butterfield Overland Stage, Wells Fargo held a monopoly on express delivery until 1869.
The parcel shipping industry took a new turn in 1869 when the transcontinental rail line was completed; linking the east coast with the west coast. From this point on, package delivery services moved quickly to rail. This faster and less expensive means of shipping parcels led to the railroad stations being staffed with ‘express offices.’
1918 saw the formation of the U.S. Railroad Administration. This caused the consolidation of all delivery services being managed by a single agency. After World War I the agency continued as the Railway Express Agency (REA).
Rural Parcel Delivery
Backing up a few years to 1913, a parcel post service was implemented for rural postal customers; combining package and regular mail delivery.
Shortly after this, companies like Sears and Robuck, Montgomery Wards, and many others were able to establish very lucrative catalog services that lead to a huge increase in catalog sales. With Wells Fargo exiting the parcel delivery service business, the U.S. Postal Service once again had the mail monopoly.
More Vehicles and Highways
The United Parcel Service (UPS) may claim being established back in 1907, yet the company we know today did not take off until just before World War II. After the war was over the massive highway building projects, low cost of vehicles and inexpensive fuel allowed UPS to grow quickly as a private courier service; along with a few other similar services.
With more and more households purchasing automobiles, rail travel declined. This decline caused the reduction in rail passenger services and had a direct impact on rail-based package shipping. This led to the cancellation of the mail contracts with the railroads, which in turn caused further rail passenger service cuts. In 1975, the Railway Express Agency (REA) went bankrupt and ceased to exist.
While the Postal Service did contract with various national and local air services to ship perishables and expensive goods , it was not until 1973, when Federal Express (FedEx) implemented the “hub and spoke” system. Deregulation allowed FedEx to establish an air-based system capable of delivering small packages—including mail—overnight throughout the country. This caused the USPS to create the Express Mail service and went back to Amtrak to carry the mail.
We have so many choices on how we would like our parcels to be delivered. With drone and robotic technology being perfected, I am constantly amazed at how the U.S. Postal Services continues to stay competitive and keep working at improving their services.