Implications of Electronic Mail and Message Systems for the U.S. Postal Service

42 . Implications of Electronic Mail and Message Systems
Other Sensitivity Runs
In order to fully test the sensitivity of the
base case results to changes in key assump
tions, several other sensitivity runs were con
ducted. The results are summarized in figure
7. The projected USPS delivered mail volumes
would be higher than the base case if: 1) EFT
growth rates were cut in half (half of what were
assumed for the base case); 2) the underlying
growth in the mainstream was 3 percent rather
than 2 percent (discussed earlier); 3) 5 percent
penetration of Generation III EMS was de
layed 3 years; or 4) Generation II EMS stimu
lated 100 percent additional traffic. If two or
more of these changes from the base case oc
curred simultaneously, the projected USPS
delivered mail volume would be even higher
than shown in figure 6.
On the other hand, the projected USPS mail
volumes would be lower than the base case if:
1) Generation III penetration was accelerated
by 3 years; 2) USPS did not deliver 100 per
cent of industry Generation II EMS hardcopy
output; 3) the underlying growth in the mail
stream was 1 percent rather than 2 percent;
or 4) a large percentage of second and third
class mail was lost to alternative delivery serv
ices. Again, if two or more of these changes
from the base case occurred at the same time,
the projected USPS delivered mail volumes
would be even lower than indicated in figure 7.
OTA's qualitative evaluation of the likeli
hood of various changes is summarized in
table 9. With respect to changes that would
reduce mail volume compared to the base case,
OTA concluded that a 1 percent underlying
mainstream growth rate, a doubling of the in
itial EFT growth rate (from 20 to 40 percent),
and an acceleration of the year of 5 percent
Generation III penetration (from 1987 to 1984)
were all unlikely, as was a significant reduc
tion in USPS delivery of industry Generation
II hardcopy output (short of a major revision
in the Private Express Statutes). OTA did con
clude that significant diversion of second and
third class mail to alternative delivery services
was possible, although probably not at the

for the U.S. Postal Service

rate assumed in the sensitivity run shown in
figure 7.
With respect to changes that would increase
projected mail volume compared to the base
case, OTA concluded that while a 4 percent
underlying mainstream growth rate was un
likely, a 3 percent rate was quite possible,
given growth trends during periods of eco
nomic prosperity. However, the current uncer
tainty in the short- and long term economic
outlook suggested to OTA that a 3 percent un
derlying growth rate assumption would have
to be considered somewhat optimistic. OTA
also concluded that reductions in the base case
rates of development for EFT and Generation
III EMS were possible, due to marketing and
competitive (and, in the case of EFT, regula
tory) uncertainties. On the other hand, tech
nology per se does not appear to be a limiting
factor, and the sales of home computers, com
puter games, and small business computers
are indicative of rapid development. As for the
stimulation of additional Generation II EMS
volume, OTA could not determine whether the
experience with all electronic technologies
(e.g., telephone) is applicable. Some stimula
tion of additional messages, although prob
ably considerably less than the 100 percent
stimulation assumed in the sensitivity run
shown in figure 7, seems possible. This and
two other sensitivity runs are discussed in
more detail below.
One Hundred Percent Stimulation of Gen
eration II EMS Traffic. --The base case as
sumed that Generation II EMS traffic would
be diverted on a one for one basis from the con
ventional mainstream; that is, Generation II
EMS volume is subtracted from the conven
tional mail volume. In actual practice, Genera
tion II EMS systems might stimulate addi
tional traffic, rather than just diverting con
ventional mail traffic.
Experience with other electronic communi
cation services suggests that the availability
of Generation II EMS may indeed stimulate
demand for new messages not presently sent
through the mail at all. Figure 7 shows the

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed November 26, 2014.