The mail and the Net U.S. Postal Service gets an online boost

At a recent conference that attracted 15,000 eBay enthusiasts to Las Vegas, the main sponsor was a big advocate of online shopping: the U.S. Postal Service.

''I have one message today for the entire eBay community,'' Postmaster General John Potter said in a speech. ''We love every buyer, every seller, every power seller. Thank you for shipping with the United States Postal Service.''

As people send e-mail and e-cards instead of handwritten letters and greetings, as they pay more of their bills online and file their tax returns electronically, the Postal Service has started to seem outdated.

Yet the Internet is actually injecting new life, and sorely needed revenue, into the Postal Service. And it is happening with packages, millions of them shipped every day, in a journey that starts with a few mouse clicks and ends days later at a customer's door.

In 2005, revenue from first-class mail like cards and letters, which still made up more than half the Postal Service's total sales of USD 66.6 billion, dropped nearly 1 percent from 2004. But revenue from packages helped make up for much of that drop, rising 2.8 percent to USD 8.6 billion last year, as it handled nearly three billion packages.

It is impossible to say how many of these were online orders, but Postal Service officials give e-commerce a lot of credit.

''Six years ago, people were pointing at the Internet as the doom and gloom of the Postal Service,'' said James Cochrane, manager of package services at the Postal Service. Instead, ''the Internet has ended up being the channel that drives business for us.''

FedEx, DHL and United Parcel Service have also gotten a boost from online shopping. ''E-commerce has clearly benefited all the companies in the package delivery business,'' said Robert Dahl, the project director of Air Cargo Management Group, an aviation consulting firm in Seattle.

But nobody needed the new business more than the Postal Service, which now works closely with some Web giants.

''We love the U.S. Postal Service,'' said Patty Smith, a spokeswoman for Amazon.com. ''They're critical in helping us get packages out. They hit the customer every day, whether it's with an Amazon package or not.''
Netflix, which rents DVDs through its Web site, is so dependent on the post office that when the company needed a chief operations officer, it turned not to a general logistics expert but to someone intimately familiar with how mail gets delivered: William Henderson, a former postmaster general.

Netflix ships 1.4 million movies every day, and it expects to spend about USD 300 million on postage this year. Henderson is ''the only guy on the planet who looks at our volume of mail and thinks of it as quite small,'' said Reed Hastings, the chief executive of Netflix, which is based in Los Gatos, California. ''It's a trickle of mail to him, where to anyone else it's a torrent.''

Since arriving at Netflix, Henderson has helped the company take advantage of discounts available to companies that pre-sort their mail, and improved efficiency at its 40 U.S. shipping plants, each near a mail sorting center. Netflix plans to offer electronic delivery of movies, but Hastings said the company expected to keep mailing DVDs for some time.

One of the biggest boosts for the Postal Service has come from eBay, the online marketplace, whose sellers ship millions of packages every year.

''Shipping is an incredibly important part of trading on eBay,'' Meg Whitman, eBay's chief executive, said as she introduced Potter at the Las Vegas conference. ''The men and women of the United States Postal Service are really the unsung heroes of the eBay community.''

According to a study conducted by Forrester Research for Shop.org, a division of the National Retail Federation, online sales of items that are shipped are expected to rise 20 percent this year from last year, to nearly USD 132 billion
EBay shippers, Potter said in a recent interview, have accounted for more than USD 1 billion worth of postage since the Postal Service started working with the company in 2004.

''They're very helpful,'' he said. ''We're finding a lot of synergy between what we have to offer and what some of the companies on the Internet are trying to do.''