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Local Startups Could Hurt U.S. Postal Service

By Kyle Alspach, Boston Business Journal
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File Photo (Photo credit should read KAREN BLEIER/AFP/Getty Images)

File Photo (Photo credit should read KAREN BLEIER/AFP/Getty Images)

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BOSTON (CBS) – At HubCast Inc. in Wakefield, demand is surging for its cloud-based service that prints corporate materials close to where they’re needed, slashing mailing distances.

Another local startup, Framingham’s Punchbowl Software Inc., contends that its “lifelike” digital greeting cards could gain acceptance as an alternative to paper cards. And Chargify LLC in Needham says it has developed a simpler way for companies to set up recurring credit card billing, further hurting the appeal of taking a check.

As bad as things have gotten for the U.S. Postal Service, there appears to be no pause in web innovations that might cause still more disruption. More than a few Boston-area startups offer products whose success would come at the expense of the traditional postal mail.

Lisa van der Pool of the Boston Business Journal reports.

“You can’t stop what’s already going on,” said Matt Douglas, founder and CEO of Punchbowl. “The dam has broke, and despite how much we all love the post office as an American icon, it’s got to figure out a new way of doing business.”

A study at Central Washington University found that the postal service’s loss climbed to $8.5 billion in 2010 from $900 million in 2006, the result of email and online bill paying, competition from private carriers, and the economic downturn. The USPS is now eyeing the closure of hundreds of post office branches, including dozens in Massachusetts, and this month said several Bay State mail-sorting facilities also are at risk.

“The Internet has led many consumers to pay bills online, and communicate through electronic means. These shifting customer habits will continue to add to the migration away from traditional first-class mail,” the USPS said in a response to a question about its future. “Our future business model will undoubtedly look different from the Postal Service of today, but the core of what we do will not change.”

Just how different that business model looks, however, will depend in some part on how much the current wave of web-based innovations from startups like HubCast and Punchbowl, catches on.

HubCast is the farthest along in disrupting things in the world of mail delivery. The company expects its service will cut shipping distances for printed materials by a total of 25 million miles this year. About 40 percent of HubCast’s business is located in the U.S., said president Tony Dolph.

“It was common with the old process to print 50,000 of something, and ship 5,000 to 10 different locations,” Dolph said. “What we do is, if it needs to be in San Francisco, it’s printed (near) San Francisco. That reduces the shipping distance, and the cost of doing so.”

About 600 customers use the service, which entails loading files digitally onto the Internet cloud and choosing where to have them printed. HubCast’s network of printers, which are located in almost all major economic regions globally, take it from there, Dolph said.

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