• on Jul 30th, 2012 in Finances: Cost & Revenue | 2 comments
    The U.S. Postal Service is one of the largest real estate owners in the United States with more than 8,600 facilities and 950 million square feet of land. (The Postal Service leases another 24,600 facilities.) It also has about 357 unused land parcels with no structures on them, which have a book value of $128 million. The lands’ assessed values are likely to be significantly higher. The Postal Service has contracted with real estate company C.B. Richard Ellis to sell its surplus real estate, which includes both buildings and land. You can find the properties on the following website, http://www.uspspropertiesforsale.com/. The sale of properties would generate cash flow for the financially strapped organization. It would also contribute to streamlining its physical footprint as the Postal Service aligns itself to be a leaner, faster, and more market-responsive organization. However, the sale of real estate assets would not produce recurring revenues. Should the Postal Service consider leasing unused land parcels to developers so they can be used in a creative way to generate alternative sources of revenue? Or is this the right time for the Postal Service to sell its unused land parcels as it shapes itself into a leaner infrastructure? Or does it make sense for the Postal Service to hold these properties now and try selling them once the current real estate market regains some stability?
  • on Jul 23rd, 2012 in Ideas Worth Exploring | 2 comments
    Between Fiscal Years 2004 and 2011, the U.S. Postal Service implemented over 100 area mail processing (AMP) consolidations, reducing the number of mail processing facilities from 676 to 461. Following implementation of an AMP, the Postal Service completes a post-implementation review (PIR) — a two-step documented process that tells management whether or not an AMP achieved the anticipated results. The PIR compares pre- and post-consolidation data, including projected savings, costs, workhours, and levels of service. The first PIR is supposed to be completed approximately 6 months after the AMP consolidation and it usually indicates whether or not the AMP is going to achieve the projected savings. In addition, it alerts management of any action needed to ensure AMP goals are met. The second PIR is supposed to be completed after the first full year of implementation and it compares the proposed AMP results against the actual results to determine the success of the consolidation. Like the first PIR, it provides management an opportunity to take additional action as needed. Please share your ideas on the subject of PIRs and your responses to the questions below: • Do you think the PIR is an adequate success measurement tool for AMP consolidations? • Are there ways, other than a PIR, to measure the success or effectiveness of AMP consolidations? • Should PIR results be disclosed publicly? Why or why not? This blog is hosted by the OIG's Planning, Innovation, and Optimization directorate.
  • on Jul 16th, 2012 in Mail Processing & Transportation | 2 comments
    The U.S. Postal Service has a long and storied history of moving mail on rail dating from the beginning of the railroad industry in the early 1800s. Mail was sorted on trains and Post Offices and processing facilities were located near rail stations. Many innovations and changes to rail, including the very development of modern freight rail service, were closely tied to the movement of mail. Today, however, the Postal Service meets its surface transportation needs almost entirely by using trucks owned by highway contractors. By contrast postal competitors and many others have taken advantage of the dramatic changes in the rail industry in recent years and greatly expanded their use of rail, realigning their networks with the nation’s railroads. The Office of Inspector General’s new paper Strategic Advantages of Moving Mail by Rail studied this rediscovered opportunity and found: • Shifting a portion of mail volume to rail without changing the overall transportation network could save $100 million per year. • If the Postal Service made an even greater commitment to rail, altering its network, it could realize even greater savings. • The use of intermodal rail can contribute significantly to reducing greenhouse gas emissions and meeting the Postal Service’s environmental goals. • Because of its lesser sensitivity to fuel price increases and greater control of its own infrastructure, rail transportation has major, long-term strategic advantages over highway. Rail transportation meets the needs of the Postal Service’s competitors and has become the industry standard for long distance surface transportation. Where the use of rail would allow it to meet service standards, should the Postal Service give it another try? Let us know what you think.

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