Same-day mail services scurrying in long-distance business market
It's a long way from the ambling postman with Spot nipping at his heels. Mail delivery today is verging on the instantaneous, and methods of transmission seem to come in as many flavors as ice cream: You've probably seen commercials for Federal Express' Zapmail, MCI Mail, and Western Union's EasyLink.
Behind the ads is a no-holds-barred battle for a chunk of the ''same day'' mail market. The competition is fierce, but so far the market appears large enough to handle all comers.
Some analysts, noting that the the electronic communications revolution is gathering steam, think Federal may be missing the ''same day'' mail boat by investing an estimated $100 million in facsimile (copy) transmission for Zapmail , instead of computer transmission as offered by MCI and Western Union. Although facsimile allows a company to send graphics and text, special equipment is required. Critics see more companies installing computers than facsimile equipment - hence their skepticism on ''fax.''
Others, such as George C. Strachan, a Value Line investment service analyst, see same-day delivery as a natural outgrowth of Federal's overnight document delivery service. Federal is taking advantage of what Value Line calls the ''very excellent ground service'' which let it charge customers a premium in the market for delivering packages and documents. Surveys show that 10 to 20 percent of Federal's overnight delivery business is actually frustrated ''same day'' demand, says Prudential-Bache analyst Craig A. Kloner.
Besides drawing same-day customers from its overnight customers, Federal hopes to crack the $8 billion courier-service market. Same-day courier companies charge an average of $125 for ''rush'' original-document delivery cross-country - a service that is limited by the speed of air travel. For those whose need for speed can be satisfied by sending a copy, Zapmail's two-hour delivery of one to five pages for $35 appears to be a bargain. (Federal promises one-hour delivery for $25 if you drop it off at one of Federal's offices yourself.) It will send the original along later for an extra $2.50.
To send Zapmail, all you need is a telephone. Federal Express will pick up your document, including graphics, transmit an exact copy to your addressee's city, and deliver it on 81/2-by-11-inch bond.
Mr. Kloner notes that Zapmail, with an ''outstanding'' quality of copy, should definitely repay the development costs, but it will be ''five to 10 years'' before it's certain how successful it is. No one knows what kind of technology is just around the corner which could make Federal Express passe, he observes, citing, as a wild thought, possible future development of something similar to a ''Star Trek'' transporter.
In contrast, MCI has approached the same-day delivery market from the base of its extensive telecommunications system. This system supported its successful plunge into the long-distance phone service market a few years ago. Although MCI was one of the pioneers in taking away profits from the AT&T long-distance system, these days it has plenty of competition from other long-distance companies. But by the time competitors might cut appreciably into MCI's long-distance market share, MCI plans to be riding the crest of the emerging same-day mail market.
To send documents by MCI Mail, you need a computer and word processor or similar equipment, and you need to be ''registered.''
Before MCI, says William A. Stern, ''you and I would have to work for the same organization'' to send electronic mail to each other. Ten months ago MCI broadened that closed-user network, making it possible to receive an electronically generated letter on paper.
Now, Mr. Stern says, someone can dial a telephone number and print a letter on a pre-registered letterhead in an MCI station. Purolator Inc. delivers the letter, marked with a person's pre-registered signature, in four hours or less (as long as the recipient is within a 35-mile radius of one of 18 urban centers). MCI charges $25 for paper copy delivery. But if the recipient is a registered MCI user it charges only $1 for the equivalent of five pages sent from computer terminal to terminal, and it charges no subscription or minimum usage fees - the only fees are for messages actually sent.
Sending a message (of letter quality in upper and lower case) via Western Union's EasyLink also requires a computer, word processor, or similar equipment. To sign up, users give their name and kind of equipment over the phone; a password can be assigned within 72 hours. There is no sign-up fee for EasyLink or for the first three months of service. After that, Western Union charges a monthly $25 minimum usage fee - a fee the company says never shows up on most bills, because most of its customers run up monthly letter-sending charges totaling more than that minimum.
Through this instant mail, you can send the equivalent of a one-page typewritten letter to someone who also subscribes to EasyLink ''for less than a cost of a postage stamp,'' says Charlie Gragg, director of software distribution at Western Union offices in Upper Saddle River, N.J. Or starting early next year , you can send a 10-page document by computer to a Western Union office, which would in turn deliver it by DHL courier to a computerless addressee. Western Union is promising two-hour delivery to one of 30 major cities for $30 to $40, a spokesman says.
Since the beginning of August, any one of 500 computer dealers could sign up EasyLink customers through sales of IBM Personal Computers. EasyLink is a ''primary focus'' of the company, says Mr. Gragg. Western Union needs to capture a good share of the same-day mail business to turn around its recent losses in the telecommunications industry. The company recently pulled in T. Roland Berner , who was chairman of the Curtiss-Wright Corporation, as its new chairman to help drain that pool of red ink.
MCI Mail and EasyLink both tout their services as ideal for sending simultaneous messages to mailing lists on a few hours' notice. Instead of writing the letters, printing them, addressing the envelopes, and sending them yourself, Raymond Marks, sales vice-president at MCI, suggests hooking up your telephone modem and sending your word-processed letter to pre-compiled mailing list ''A'' or ''B'' by pushing a button on your computer. He says it makes instant follow-through possible.
The US Postal Service dropped its money-losing and controversial E-COM bulk mailgram venture (a competitor of EasyLink) in June. But the USPS still offers the latest technology for $5 per page to zap copies of mail between some US cities and 13 countries overseas.
Some analysts expect an industry shakeout as these companies play for market share. But the speed of new technology appears likely to give one company after another a trump card in the game. And no one really knows how big the market is. Express mail, for instance, has been around only a little more than a decade. Electronic mail is still in its infancy. HOW TO SEND YOUR INSTANT MAIL If you have a: You can use: Cost to subscribe: Cost per msg.: Computer, MCI Mail No cost, except Instant: $1 word-processor, etc. to register Delivered: $25 signature, for 1- to 5-page letterhead equivalent Computer, Western Union's $25 minimum usage Instant: $1.35 word EasyLink starting the processor, etc. fourth month Telephone Federal Express No subscription Delivered: $35 Zapmail