Transportation Deployment Casebook/Life cycle of the post office

Introduction
In 1775, as the threat of war loomed over the American colonies, the Second Continental Congress convened in Philadelphia to plan for the defense against impending aggression from the British Crown. Understanding the vital importance of reliable channels of communication and intelligence during a war, a committee led by Benjamin Franklin was established to evaluate the possibility of developing a formal postal system. A month later the post service was established with Benjamin Franklin as the founding Postmaster General.

While post offices did exist in early years of the postal service, it took until 1788 for the newly formed nation to authorize the postal service to expand the system. In 1780, there were only 75 post offices. Shortly thereafter, the volume of post offices expanded rapidly. While the volume of mail delivered continued to expand through the conclusion of the twentieth century, the post office as a structural component of the postal service peaked in 1901.



This paper offers a lifecycle analysis of the post office as a lens through which to view the United States Postal Service. This analysis is couched within the historical and political context within which the post office grew and matured.

The United States Postal Service
While federal (though it wasn’t technically federal at this point since the United States had not yet been established) involvement in mail delivery began in 1775 under the Post Office Department, mail delivery within the colonies significantly predates this. It began informally. Messages were communicated throughout the colonies by friends and merchants, as well as American Indians. Most mail however was carried over the Atlantic to and from Europe, which is what led the British Crown to establish the first official mail service in 1639. At this time taverns and coffee houses were used as post offices. Early growth of the postal system occurred in fits and starts through prodding from the British Crown. But eventually a postal system began to emerge with regular routes and dedicated post offices.

To the credit of Alexander Spotswood, postmaster general for America beginning in 1737, a 31 year old Benjamin Franklin was given an appointment in the postal system as postmaster of Philadelphia in 1737. Franklin worked vigilantly to improve the postal system and in 1753 he was appointed by the Crown as joint postmaster general for America, a position he held until dismissed for acting in league with the colonies as the Revolutionary War drew near. During his tenure as postmaster general, significant improvements were made to the system. Routes were surveyed and operated on scheduled times. Post offices were inspected. Delivery routes were re-organized.

After Franklin’s dismissal, William Goddard established the Constitutional Post as a replacement service for colonial mail delivery and he based it on subscriptions. Goddard’s service grew quickly and by 1775, when the Second Continental Congress met, his private postal service was quite successful with 30 dedicated Post Offices in operation.

On July 25, 1775, shortly after the earliest skirmishes of the Revolutionary War, the Second Continental Congress authorized establishment of the Post Office Department in recognition of the critical need for reliable conduits for intelligence. Benjamin Franklin, already a veteran of the postal business, was named its first postmaster general. William Goddard was appointed surveyor for the department.

Early efforts of the department were dominated by military communications. By 1783, with the war ended and Ebenezer Hazard at the helm, efforts were refocused on system expansion. New westward routes were established and stagecoach companies were contracted to deliver mail. In 1788, the Post Office was granted authority by Congress “to establish Post Offices and Post Roads.” This led to a rapid expansion of post offices and mail delivery as a whole. As the country grew so did the Post Office Department. States and territories continued pressing for new routes and even faster delivery. In 1789, shortly after the authority of the Post Office Department was expanded, revenue for the department was a meager $7,510. By 1860, just one year before the Civil War, revenue had swelled to $8.5M. This was not without cost however. Expenses for the department often outstripped revenue.



The magnitude of growth in the Post Office Department in its early years seem substantial, except when compared to the growth that occurred later later in the life of the department. In 1930, revenue for the department was just over $800M, an order of magnitude greater than existed in the 1860s. Seven decades later, revenue for the department (by now renamed the United States Postal Service) was another two orders of magnitude greater than revenue in 1930 with income peaking out at nearly $75 billion.





There are a great many factors that have influenced the postal service over the course of its history. As a public or quasi-public agency (depending on the time), it has always been heavily influenced by policy in Washington DC. Considering the longevity of the postal service, it has also had to adapt to a great deal of technological innovation. The following represent significant dates or eras that bore significant impact on the postal service:

Basic Timeline
1788 - the postal service is granted authorization to establish post offices and postal roads, which dramatically expands service options.

1800s - the geographic scale of the United States expanded rapidly as states and territories were added.

1823 - Congress declared waterways to be post roads. Steamboats were regularly used for mail delivery.

1832 - just three years after the locomotive completed its first run in the US, the Post Office Department adopts rail as a mode for mail delivery.

1847 - first postal stamp issued

Winter of 1860-61 - the Confederate Post Office Department was established to serve the Confederate states.

Summer of 1861 - the Pony Express (which had been privately established a year earlier) was adopted as a mail route for enhanced delivery to the Pacific coast.

Fall of 1861 - the transcontinental telegraph line was completed, which precipitated the decline and discontinuation of the Pony Express just months after it was commenced.

1863 - Congress establishes free city mail delivery. This is the first time personal addressed were required on an envelope.

1872 - the Post Office Department was established by congress as an executive department.

1902 - free rural mail delivery became a permanent service. This precipitated a significant decline in the post office as a vehicle for mail delivery.

1910 - delivery of mail by rail peaked when more than 10,000 trains moved the mail. Trains were equipped with mail cars capable of sorting, storing and distributing the mail.

1918 - schedule airmail service began

1930-60 (approx.) - road and automotive technologies begin improving dramatically, thereby enhancing the efficiency and speed of mail delivery.

1971 - delivery of mail by rail was finally discontinued and Post Office Department renamed United States Postal Service

1994 - USPS launched an internet website...the beginning of the end for standard mail delivery.

History of the Post Office
The post office as a technology played an integral role in the early development of the Post Office Department. The earliest post offices were merely taverns and coffee houses where mail would be left for individuals to collect. As mail volumes increased the need grew for a more formal delivery mechanism. Taverns and coffee houses weren’t capable of handling, sorting or distributing large volumes of mail. Post offices had been developed in England prior to this point, but the first official post offices in the US were established in 1692 by Thomas Neale. Interestingly, Neale never actually visited America. He managed the system from England.

In 1789, when the federal government was first formed, there were 75 post offices in the United States. In their first year of office, Congress granted the still young Post Office Department authority to establish post offices (and postal roads). That authority, coupled with an increasing demand for mail and an expanding American geography, precipitated a rapid expansion in the number of post offices. By 1830, just four decades after the postal service was permitted to establish post offices, the number of post offices had expanded to almost 9000. The graph below charts the early growth of the post office as a technology.



The number of post offices expanded steadily in US until 1860s when the country devolved into civil war. During that period post office growth stalled and even declined. After the war was over, steady growth resumed. That growth continued until 1901 when it peaked and began a dramatic decline.



In recent years the volume of post offices has continued to decline, albeit at a reduced pace. The function more as nodes within the mail system as opposed to origin or terminations (though they do still serve that capacity on a limited scale). The decline of the post office was caused by permanent implementation of free rural mail delivery at the turn of the century.

Function of the Post Office
As a technology, the post office was important because it served as the point of origin and termination for mail within the postal system. Any person wishing to send a letter would be responsible for conveying that letter to the post office. There were no mailboxes and there was no door-to-door delivery in the early system. Similarly, if a person received mail they would be responsible for collecting it themselves (or arranging for another to collect it). An entertaining exception to this rule occurred in the 1830’s at the Post Office in Springfield, IL where a young Abraham Lincoln was appointed postmaster. As was his custom, if an addressee did not collect his/her mail, Lincoln would delivery the letter personally.

In addition to serving as a point of transfer for mail into and out of the system, it also served as a sorting house. The mail from any given day was inevitably bound for a variety of destinations. Postal staff were responsible for sorting that mail by destination and assigning it to a route. When the destination of a letter was relatively distant, mail would be directed through intermediate post office hubs.

Because mail was collected by addressees, there was a need for post offices to be accessible. This led to a substantial multiplication in post offices across the country. As is noted above, a shift in service caused a reverse in the growth of the post office. This shift in service was the adoption of free rural mail delivery. This diminished the need for post offices because the need for access to a post office diminished. If a resident could expect mail to be delivered to their door, there was no longer a need for a nearby post office. The other rationale for fewer post offices was a matter of internal efficiency. It was more economical to sort and distribute mail from a single central post office than from two post offices. As a result of these new service dynamics, there are fewer than half the post offices than there were at its peak in 1901.

Life Cycle of the Post Office
As is true is some regard for most technologies, the deployment of the post office can be described as an S-curve with a birth phase, a growth phase and a maturity phase. The equation for this S-curve is below.

S(t) = K/(exp(-b*(t - t0))

where:

S(t) = status measure (# of post offices) t = time (year) t0 = inflection point/time when ½ K is achieved (year) b = coefficient K =saturation point (maximum # of post offices)

Depending on the age of the technology and the phase it is in, the process for developing a fitted curve may vary. For a technology still growing, K will not be known, though it can be estimated. If the technology is very young, it may not have even passed its inflection point, which further complicates the process of developing a good curve fit. In the case of the post office, however, the maximum volume of post offices was achieved in 1901, which makes K and t0 easy to ascertain.

In order to determine the final coefficient ‘b’, it is necessary to develop a best fit curve. There are many approaches to solving this problem. One of the easiest ways to develop a best fit curve is by transforming the s-curve function to a linear equation and using the built-in functionality within Microsoft Excel. Below is the linear equation:

y = b*x + c

where: y = LN(# of Post Offices/(K - # of Post Offices)) x = year

Because this s-curve is designed to model the birth, growth and maturity of a system, the available post office data has been cut at its peak. Including the decline of the post office would diminish the appropriateness of a s-curve in modeling the lifecycle of the post office. Since 1901 represent the peak year for the post office, that is the final year included in the life-cycle analysis.

For the sake of comparison, below is a graph of an idealized life-cycle curve. Important qualities of the curve include symmetry around t0. T0 is at 50% saturation and is also at the midpoint in time. Depending on the context of the technology, this curve can occur over a shorter or longer span of time.

Applying the s-curve to the post-office produces the following results:



An visual analysis of the data suggests that the life-cycle model does a reasonably good job of representing the life-cycle of the post office. A statistical analysis finds an R2 value of 0.93, which is strong but could be better.

There are a couple important consideration when reviewing the data. First, the Civil War clearly interrupts the growth pattern of the post office. After war is over, growth resumes as life-cycle model suggests it should. If the war years were removed from the analysis, we would inevitably find a better relationship between the actual data and the model. The other important observation is that, from the perspective of the model, the history of the post office is that of a life abbreviated. It doesn’t appear to fully enter maturity as we would expect it to. Visually, it appears to be just leaving the growth phase when it abruptly peaks and begins diminishing.

The reason for this of course is the policy of free-rural delivery, which was implemented at the turn of the century and was discussed earlier. Because 65% of the population lived in rural areas and because of the sheer scale of rural area, this was a substantial change in service. Furthermore, because the shift occurred entirely within the postal service (and because the postal service monopolized mail delivery) the transition from post offices to direct delivery was abrupt. If the technology would have matured as the model suggests it should, its growth would have gradually slowed before declining (assuming it declines eventually).

For the sake of analysis, the following chart assumes the Civil War never happened. It also assumes free rural delivery was never established as a policy. To do so, the years of 1861-1865 were removed from the data. Additionally, K is estimated to be higher than the actual peek. The estimated K is that which produced the greatest R2. The estimated K value for this modified data set is 85,000 and the R2 is .96, which is marginally better than the original fit.