Media Mail is required by congress to be very cheap. Library Mail is even cheaper but you as a civilian can't use it. Both are basically a subsidy for the educational and academic worlds. No private sector entity would ever offer it unless the government started licensing package delivery companies and made it a condition of license.
Parcel Post is the unrestricted version of Media Mail. Parcel Post isn't competitive with Priority unless its over 10 pounds, just pay the extra 50 cents for Priority. Some things by law you must ship Parcel Post because the things can't ever be placed on a plane (Priority Mail). Parcel Post never goes on a plane. 48 to Hawaii or Alaska is a month with Parcel Post. The business model that UPS/Fedex use is to price at nearly a loss for large vendors, and small vendors make up for the cut throat contracts to large vendors. 1 lb by Fedex Ground is $9. ~$8 for UPS. USPS low $5 retail. There is no Fedex/UPS equivalent of First Class. You don't get tracking with USPS and no date definite delivery, but its alot cheaper. There are things that I've sold on ebay, that without first class package rates, would be cheaper to throw in the garbage can than send off by Fedex/UPS.
One multinational corporation I have a relationship with, does not fax or email for legal reasons, and instead overnight UPSes 1 8x11 sheet of paper to me for what UPS charges retail $26. I assume that this corporation does this for all their clients with the same relationship as me. Obviously, this corporation does NOT pay $26 per letter, it probably pays much less than $12.85 that USPS charges for Express Mail. Final point of the story is, FedEx and UPS do not want small businesses/consumers as customers and have very high retail rates for them. Since FedEx/UPS negotiate confidential custom rates with their customers, it is impossible to know how much you are being taken advantage of. USPS's rates, retail and bulk shipper, are all public knowledge and posted on their website if you look long enough. Without USPS's even rates, FedEx/UPS would charge a minimum of $100 to delivery to any rural address. The county government would have to set up their own county mail department just to delivery the property tax bill and fines to residents. The USA is better off with USPS than without.
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