on Apr 19th, 2010 in Delivery & Collection | 152 comments
 
Public policy debates about solving the Postal Service’s financial crisis have largely focused on reducing costs by cutting service such as Saturday delivery, transitioning from brick and mortar post offices to alternative retail sales channels, or limiting other functions performed by the Postal Service. There has been less talk about the costs of meeting delivery service standards, which were reviewed following the passage of the Postal Accountability and Enhancement Act of 2006. Can the Postal Service relax some of its requirements to save money in transportation or processing costs? Right now, its goals are to deliver First-Class Mail in 1 to 3 days and Standard Mail in 3 to 10 days. A slight adjustment of these standards in particular areas might make it possible to save a great deal of costs. Instead of developing the goal first and trying to reach those levels, no matter how costly it is, maybe the Postal Service should closely analyze its infrastructure and develop goals that allow for reaching the greatest efficiencies. For example, if the service standards for bulk mail from Chicago to Los Angeles were given an additional day the Postal Service could avoid the expense of trucks and instead utilize economical rail transportation. A First-Class Mail package that currently travels by air could be carried by truck if given another day. By relaxing service standards, the Postal Service can move further towards a hub and spoke network, which could result in substantial savings. Currently, plants may have lots of half-empty, smaller trucks fanning out to a multiplicity of plants only once or twice a day. Under this new strategy, many trucks would go to a mail consolidation facility, which consolidates the mail and ships it on larger, fuller trucks to the destination facilities throughout the day. This design has the additional benefits of network stability and is capable of scaling up or down with changing mail volume. The bottom line is that the Postal Service and its stakeholders need to decide what service standards are worth the cost. The Postal Service should have an honest and informed discussion about the cost savings that it can pass on to the public by relaxing some of the present delivery service standards. Do you think the Postal Service should adjust its delivery standards to cut its costs? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

152 Comments


If the USPS were to adjust the delivery date by 1 or 2 days most mailers such as publishers would make adjustments to their schedules to accomadate the changes. For the most part I don't think most people would really notice if it took one more day or not.

If it would reduce the overall cost of mailing or put off some postage increases in the future then I'm for it

One large problem is too much money being paid to retires and current workers. The wages and benefits are higher that most private companies. Get real and lower wages and retirement payouts. That is what big business must also do (and to some extent is doing).

As someone who has worked with Periodicals for over 20 years for every kind of publication I think that people in our industry tend to want to separate service and cost. Many with freqencies of Monthly or less should be happy with a day or two longer time in transit as long as there was consistency (keeping costs down) Others with time sensitive material and freqiencies of weekly or more need fast and predictable The publishers who have both situations must demand service.

I will now commit blasphemy and suggest that we be willing to split the periodical rate into expedited and normal and let those publishers who need it pay for it.

Time was one of the first publishers to demand that we all pay for the amount of service the USPS provides based on the sortation we are able to achieve. However that publisher never suggested that weekly magazines pay more for service than a montly. No surprise here.

If mail delivery were slowed to the point where the average consumer had to wait 3 - 5 days for a first-class letter delivery, it would jeopardize the entire relationship an individual has with the mail. The expectations (even if not in practice) are 1 - 3 days, which works well for many businesses that send individual contracts, samnples, etc. out on a daily basis. For business mailers, the choice would be to pay extra to use a mail expeditor to drop deeper in the mailstream, but for the consumer, the lack of postal "service" would be very noticable and undesirable, and I would think that other, quicker methods of communication might be utilized. Interesting question, though, and certainly worth polling the public on!

Chaile Cole is wrong. For time sensitive weekly and Daily Periodicals, we can't just adjust our schedules.
You would be cutting 1-2 days of news from the publication

The most important service standard that the Postal Service must maintain is Universal Service. You can argue over 5 day delivery or 6, you can argue about the service standards for First Class vs. Priority vs. Express; but, I don't believe anyone completely understands the importance of a network of delivery people who efficiently go to every home almost every day. If we should have an attack against the national power grid, the Postal Service would be the only communication network holding the nation together. If we should suffer a chemical, nuclear, or biological attack, the Postal Service would be the only agency capable of distributing life saving drugs to every household every day. The importance and durability of the Postal Service as a communication network at a time of crisis (over TV, Radio, Internet, and every other mode of communication or delivery) would be critical to our survival as a nation. The survival of the Postal Service is imperative to our national security.

Our forefathers were very smart to protect it by the U.S. Constitution. While younger generations may not understand the importance, let every electronic device in our country shut down and you’ll see how quickly they change their minds. Let there be a nuclear attack and then let them wonder how they will get iodine pills to survive. The Postal Service will always bring order and normalcy to chaotic times. The Postal Service and its employees, that are dedicated to duty and committed to service, is the organization, like none other, that will serve as the thread to hold this nation together if the “unthinkable” ever occurs.

So, as we protect ourselves from the “unthinkable”, we must do what ever we can to keep the Postal Service viable and profitable. Nothing should be off the table. We need to ensure whatever is necessary to sustain the organization is done for our safety and security, as well as that of our children. Congress should, more than anyone else, understand the importance of keeping the Postal Service a viable organization no matter what it takes. Let them downsize, let them reduce 6 day delivery, let them change service standards, let them take on new products and explore new concepts, but let them survive for the well being of the country.

I agree with Steven JacobInsteads and Ellie A. I also think that the USPS should focus on improving and offering faster delivery. By cutting back to 5 days a week and raising rates they are doing the opposite of what they should be doing if they want to see an increase in mail volumes. Now with so many requirements are in place to prepare the mail there needs to be a greater postage savings for work sharing. The 2009 summer sale increased mail volume and revenue while offering lower rates not higher rates. This says that lower rates for presort mail can increase over all revenue and should not just be limited to specific sales events.

Who should you listen to? It's the customers who do the mailings. They are the ones who generate revenue for USPS. The people that don't mind the loss of Saturday delivery are people who don't mail. These people do not produce revenue for USPS. Lose that revenue means the end for USPS.

Whoa wait a minute, i think everyone is missing the main point here, what is really being asked here is what the postal service and the oig, that is in the exec's back pocket truly want. relaxing standards wouldn't save money through reduced transportation, it would save money through mass plant closings and layoffs. most plants could be consolidated with ones miles away if delivery standards were relaxed, think about it, if you had an extra day, they could easily send dps mail and dbcs's into another plant, and have another day to get it delivered. unbelievable. potter and the oig need to stop with the ruse and fix the real problem which is the burden of the 6 billion dollar payment we are required to pay.

this question reminds me of the 5 day delivery question. as an american would you rather see people laid off, raise stamp prices by 50 cents or stop delivering mail a day a week? of course people will pick the reduced delivery.

the thing i always think of here is that fedex transports our mail, and is constantly making upgrades from one destination to another, and we as a main competitor are talking about taking longer to deliver mail, on time and accurate delivery is what we are about and once again, instead of doing the obvious by asking congress to fix the retirement fund, a question about reducing delivery and what would lead to plant closings and layoffs is being posted. get real.

Paul Meisel

A clerk or carrier that retire under the CSRS with a wife or husband would get $27,687.
Anyone hired after 1983 would be under the FERS. they pay Soc. Sec. and can put money into a Thrift savings plan.

Close the small Post offices or let clerks run them. Have larger offices manage the smaller offices. Get rid of Sat delivery, stop the stupid audits and throw EXFC out the window. My post office pays me a big chunk of money every month to drive home letters that are missent. 10 or more and we have to drive them to where they should have gone. So the customer pays 44 cents to mail a letter and the PO pays me 40.00 an hour and then 50 cents a mile to drive a 44 cent letter to its final destination. And we wonder why we are losing money.

stop the doom and gloom and all the crap. Don't pay vp's 80,000 to hire. Close dostricts and areas now...

As my "Frustrated" colleague above has stated, the increased EXFC testing required by the PAEA is costing us a bundle, especially in Western states where distances between offices is normally greater. The addition of a day to the time standard would not affect plant operations around here, but they would help eliminate "hot shot" runs and other extraordinary means that are now being utilized to increase EXFC scores. It appears to me that FCM is the biggest part of the problem. Priority and Express seems to flow pretty well.

This EXFC program has got to go. It's foolish to pay a rural carrier 2 min a mile and the price of gas for a 44 cent letter. On a 5 mile return trip for a mis-sequenced letter. 5 miles to return, 5 miles to get back to where you were= 10 miles
2min a mile = 20 minutes, about 8 Dollars in pay, LLV gets 10 miles a gal= 2.90 dollars. Total cost to return for a letter=10.90 dollars. For a 44 cent letter.

Push express time back to 2pm . Deviations fror express are same as a EFXC letter. Cuts profits.

It recently took 7 days to mail a first-class, one ounce letter from Gaithersburg, Md. to Tulsa, OK.

How long will it take if USPS "relaxes" their target standards?

Maybe part of the problem is that $40 per hour, but I don't really begrudge good pay for good employees. So forget I said that. Maybe the biggest problem is the absence of more mail going to those destinations to cover those costs. And what has service done to reduce that volume? I just know that in our business if we keep finding ways to do less for our customers while charging more, we'll be out of business soon. Of course, we may be out of business despite our best efforts if mail standards are reduced. It probably is time to bite the bullet and close some offices and consolidate a lot of management, but not to make service worse.

Do we really need 44 VPs with 200,000 less employees and more technology.

The Postal Service's current policy of backtracking to deliver missequenced DPS letters is one of the most ridiculous wastes of money I have ever seen. For an agency which is supposedly on the verge of financial collapse, where is the logic in this? For a 44 cent letter, paying a carrier mileage plus 2 minutes a mile!!!! This is insane! And most of the time, the letter will still be in the box the next day because the customer will most probably have already collected their mail from the box. And when will the staffing cuts make it to the management ranks? Let's eliminate some of the folks who NEVER touch a piece of mail.

The thing thats even more frustrating to to carriers is the USPS is keeping vacant routes for over 2 years for the FSS system.The FSS system doesnt work will never work and the USPS keeps these routes vacant.Why you ask because Mr potter was hoping for 5 days.So if no 5 days Mr OIG why not fill the vacancies.It would be better for the service and the moral of the postal employees(If that really means anything)

Relaxing service standards on first class letters would hasten the demise of the USPS.

First class letters are already profitable even with the current delivery standards. Overnight first class mail is highly profitable. The USPS does not have to transport this mail far and yet still receives full price postage for it. Any change from overnight mail to 2 day mail in order to improve plant “efficiencies” would lead to less of this highly profitable mail and would cost much more in profitable revenue than it would save in expenses.
A relaxation of the 2 and 3 day service standards would lead to an even faster decline in remittance payments. Remittance payments, where the USPS delivers hundreds to thousands of highly automatable envelopes to a single destination have extremely high profit margins for the USPS. Driving profitable business away is not the way to run a business.

Now if money could be saved by relaxing the service standards of lower profit margin things that wouldn’t necessarily be a bad thing. For example a money losing item like parcel post could have its service standards relaxed to where all parcel post was sorted to the carrier level at centralized locations on automated equipment. Our current practice in many places of manually sorting this product at the delivery unit is antiquated and expensive. This could save enough money to make a money losing product profitable. Also if the USPS loses any business in this product area it would currently help the USPS out financially rather than costing it financially. Of course this would mean the current drop ship discounts for the DDU on parcel post would have to go away.

The issue is less a matter of relaxing the current standards than accurately reporting the current effectiveness of the network. EXFC was designed to measure and monitor the effectiveness of the network under normal operating conditions.
The EXFC scores we see are the product of extraordinary effort. They reflect policies and procedures that are not designed to manage an efficient but instead are oriented toward returning high numbers regardless of the costs and inefficiencies needed to achieve those numbers.
Sending carriers back out to deliver one piece of mail or having personnel spend hours and miles moving missents around are less about providing service than about deceiving the monitors. Those extraordinary efforts have costs that, especially in our current environment, are unsustainable.
Senior postal management is effectively gaming the EXFC system and it ought to be a priority of the OIG to audit that and report what additional costs we are sustaining to achieve marginally small improvements in those scores.

As a frustrated mail service provider I can tell you that service standards mean nothing. We drop daily to SCF & NDC facilities, delivery standards state 3 days for SCF delivered mail and 5 days for NDC delivered mail, we track all mail using the inteligent mail barcode. Tracking shows that there is a very wide range of delivery times recently it has ranged from 5 - 45 days. We are given every excuse why this mail is not delivered within standards. Several clients have gone to alternative methods as thier messages are not getting delivered in a timely manner. This is an industry wide complaint by the mail service providers.

Where are you? I worked at SCF Santa Barbara--San Luis Obispo (Calif.) for 18 years and it was never that bad.

I agree with William Tyndale - "The issue is less a matter of relaxing the current standards than accurately reporting the current effectiveness of the network".

We drop shipped mail into an SCF and it still took 7 days to deliver. It's hard to tell my clients that the standards are 3 to 5 for FCP and 7 to 10 for STD when it can take 3 to 45 days for either class! Our customers are considering dropping mail as a marketing tool because it is just too unpredictable. I don't want to see standards relaxed, I just want them to be accurate. If you need a few extra days, fine - but tell me that & live up to it!

We too are using confirm service (tracking) and can see that our client's mail may take days to be put on a machine...and then see that it will go back on machines days later AGAIN and still take a week to be delivered. I've been told by USPS that they sweep the plants daily, but yet my mail must be sitting around somewhere for them to scan it 2x in one location & it still takes a week or two to get delivered!

It takes a day after anything happens for your update service to send an email. There is a serious disconnect between what happens in your production chain and what your eSystems report. FedEx and UPS kick your ass in this regard. Your performance leaves so much to be desired. Your ‘priority’ mail and its email notification system is just what I would expect from a government organization: a dollar short and a day late. No, wait, when it comes to ‘priority’ mail it is actually 3 days late and 5 dollars short.

I will never again use ‘priority’ mail.

I just simply think that as long as delivery service levels dont change then any change would have little impact to our day to day business. Even now, before any serious changs have been implemented we continue to have complaints about service levels so its clear that is the most important area of concern.

Most Federal Governement functions are shutdown over the weekends, close the post office as well.

Most people are either using email or other delivery methods to get some mail where it needs to go.

Umm Gee Retail Post offices --- Sounds Not the norm to say the least. Why not a storage Unit instead, go to one of the storage facilites in the area and rent out a unit to do normal operations out of --- Is this how you see the UNITED STATES Post office Operating --- Retail Stores, time to move for me!!!

Gee either your customer's don't give a damn or you really don't have any to begin with, you decide!!! Maybe a customer newsletter with this website handed out at the new Post office retail stores, gee short term costs would be down --- what about long term

What the heck, how about horse and buggy cut down on emisson and our carbon foot print ---- NO I DO NOT AGREE WITH THIS

My personal thought is that for residential (my own included) I could go without Saturday delivery - I would also be supportive if there was a plan to not deliver one other day per week. So what I'm thinking is if you take 20% of the mail and not deliver it Monday you save that route, another (different) 20% on Tuesday, etc...

I think this would save some on carriers and time, although it would be a larger load on the following day. From what I'm reading though their residential pieces for delivery is down more than 20% so hopefully it would balance off

Just my 2cents...

A

If you want to make the USPS safer and more profitable, remove the mail carriers from the road. Don't do home mail delivery anymore. If people want mail, they can purchase a PO Box, otherwise, they won't be serviced by the USPS. You get rid of this "free service", remove a lot of risk from having so many folks on the road, and lose a lot of expenses (Carrier salaries, gas, vehicle maint, etc) That's how you get the USPS profitable again. Drastic, but necessary.

I was elated when there were vending machines to purchase stamps in Greenbrier (Arkansas). Then the vending machines had a "out of service" message. So I had to either wait until Saturday, to stand in line along with other people, to buy some stamps, at the post office OR I had to drive to downtown Little Rock (Arkansas), where I work Mon thru Fri, and wait until I got off work, one day, to go stand in line, among a bunch of other people (and man, was it long!) since it stayed open until 6 pm, just to buy a book of stamps. I think it's more convenient to buy stamps out of a vending machine and if you need to mail packages, design a machine that can weigh the package and you pay the dollar amount or use a debit/credit card, to pay the postage. That way you can close the post office on Saturdays, and no Saturday deliveries, either. Could save the USPS alot of money and spare us the headaches of waiting in line just to buy stamps!

unfortunatly the government is also feeling the effects of the sagging economy.
The USPS should lay off half of its work force and then have the mail delivered every other day.
The carier can deliver one route on M,W&f and the other route on T,Th & S
I don't see any reason that anyone needs their mail every day and not every other day.
If there is something that needs to be there the next day, then they can pay for that option like they do today.
This will cut the carrier expense in half and still get the mail delivered in a reasonable time frame.

Cut back mail delivery to three times per week

Contract with private firms, (UPS, Fedex, Etc...), to take over at least some of the mail delivery if not all

End package operations, (UPS and FedEx do a much better job)

Get rid of the Union or at least the lazy Union Mind Set

Better system to handle complaints and system that actually holds postal carriers accountable. Be more responsive to the customer and friendlier wouldn't be a bad idea.

I love the post office but to be frank – you cannot continue to lose money and have the tax payer pick up the difference. The way I see it you have two choices, either continue to raise rates frequently or reduce delivery frequency. Here are some points of reform:

Postage fees should be set to not lose money, specifically for mass mailings, catalogs and other business mailing. The post office is not in business to subsidize marketing efforts of businesses, they should pay the actual cost incurred to deliver their mail.

Declining mail volume should mean declining frequency of mail delivery. Mail should be delivered once or twice per week. Cutting out Saturday delivery is a very small step that will only delay the inevitable.

Offer a simpler but higher priced service for 1-day or 2-day service as does FedEx and UPS for those who need their mail delivered sooner. A higher priced stamp should do it – why do we need to fill out forms? Introduce simple 1-day and 2-day stamps without prices on them.

I live in a town of about 5,000 and think our post office is terrific. Our service is great. We can complain all that we want, but I think it is quite remarkable that I can send a letter to anywhere in the United States for one price. I frequently hear people try to compare the USPS to FedEx and UPS, but they often contract with USPS to deliver packages to more remote areas of the U.S. The post office needs to be in small towns--you can't simply close all of the post offices that aren't in large areas. I agree that there should be more stores, etc. that can sell stamps. If they decrease the number of days of delivery and pick-up, it should become law that a company must take the post date as the day of payment. I especially think that some of the flat rates for shipping are very reasonable.

Why not reduce service to Mon, Wed, & Fri for odd numbered residences and Tues, Thur, & Sat for even numbered residences? Most people would not be adversly affected by waiting another day for service since important outgoing mail could be dropped off at the brick-and-mortor post office or the blue drop boxes. If someone needed daily service, they could get a PO box. This would keep postage rates low and keep people using the system instead of moving to alternatives such as online BillPay, email, or Skype.

I live in a small town and am extremely happy with the service the Post Office here provides. It makes me laugh however to see comments on here that packages should go UPS or Fed-Ex. I've been in the post office here several times where UPS is sending packages they can't or don't want to deliver, through the post office.
I would hate to see the Post Office cut down on any of their services or delivery days.

I think the Post Office Service could save money by cutting back on delivering mail to individual homes or companies, as much as possible. The Post Office could open mailrooms where people could pick up their mail at an assigned P. O. box. Regular city streets with single homes could have mail pick up points in the middle of street, like the type many apartment complexes use. Centralize mail delivery points as much as possible. 1 or 2 mailmen could process the same amount of mail as it would take 5 or 10 mailmen to deliver.

I would centralize mail carriers in larger metro areas, instead of having X number of carriers for each post office. This will reduce personnel, vehicles. Also, the idea of postage stamps issued by time of delivery (i.e. $15 for overnight, $10 for second day, and $0.50 for 5 days or less) would give the flexibility for using mass transit for normal mail (trains, planes, semi-trucks, etc). Packages should always cost more as they take up more space. One thing done right is the flat rate boxes. I would also increase the costs of bulk mail circulars as most people do not even read through the junk mail, which will save fuel by reduced weight.

The biggest problem with the USPS is district management and ALL the indicators they have the local postmasters chase on a daily basis. Most of these "indicators" are redundant, and directly conflict with other parameters being tracked. The other problem is the 'flavor of the day" mentality employed by these same district managers to force the local PMs to adjust there delivery schemes to accommodate a specific parameter that has fallen below standard. Without ever trying to identify WHY that particular parameter has fallen, the district will focus ALL their attention on it.Usually to the detriment of the entire operation. All too often costing money to fix something that would have been fixed anyway through the normal course of daily business.The district will panic and cause a lot of money to be spent through penalty overtime to fix this one problem, then they want to know why there was penalty overtime.This kind of thing goes on day after day!!! If the PO wants to save money start looking at the managers at the district level, they are the real problem.

Seems to me that you are going about this backwards.

You need to spend some time developing a vision for the USPS that recognizes constraints as well as reality.

What is it the USPS should be known for? How do you get from here to there? What makes you better/worse than your competition? How do you exploit your strengths? Do you shore up your weaknesses or conceded market segments to others? Finally, what is the USPS doing today that doesn't contribute to the vision and either redeploy or reduce resources.

Maybe some of the comments here can help you consider ideas, but you really need to step back and look at the business model you are operating under and make some fundamental decisions. Most of what I'm seeing is really just minor modifications to your current business as usual.

If the powers that be would charge 44 cents for all the junk mail, like "Joe Public" has to pay per letter, that is in the system, the Letter Carriers would have less to do therefore reducing the hours worked and the Post Office would have much more money with which to operate. I get several pieces of JUNK MAIL daily with a postage stamp of 14 cents or less. Get rid of the junk and the Post Office will thrive. Keep the non-profit rates reduced. They are hurting now and need membership growth.

If they are serious in saving money, starting closing some Post Offices.

Every other town doesn't need their own PO's.

Mail carriers have the best retirement and health packages. And for some reason the PO's have no money??
But of course the unions won't allow that to be cut. Let's just send all the mail to fed-x or ups. They are both making money somehow.

Hmmmmmmm.

Why does the post office retain the use of multiple standards?
In parts of the country, mail is delivered up to the doorstep of each residence.
In parts of the country, mail is delivered only to block units at each neighborhood.
In parts of the country, mail is delivered to mailboxes located along the street.
In parts of the country, mail is only picked up at regional collection points, whereas in most of the country mail has always been picked up at individual mailboxes.

If the Postmaster ran it like most businesses. There would be a review of the costs to employee benefits, pension plans, retirement age... Eliminate the pension plan and/or increase the retirement age similar to social security. You may need to outsource some of the services which are inefficient to private companies. Is the postmaster willing to stand up to labor unions?

Cut costs. Close many small post offices. Delete Saturday delivery. Allow NO overtime pay. Reduce employee pay to that paid by private sector. Restructure employee benifits including retirement to that allowed by private sector businesses such as UPS. If, all of that does not work, sell the business to a private firm and get the government out of the postal delivery business.

The post office should arrange with other businesses
to have offices in their establishments at their expense.

The post office should not deliver the mail on Saturday or on Wednesday. By eliminating two days a week, they
should save a lot of money. Instead of delivering to
individual mailboxes the post office should deliver to
group mailboxes in subdivisions. That way one stop does
it. If businesses need to get something to a customer
faster, they could fed express it instead.

Make the employees go to work, my neighbor works at the post office, goes to work twice a week(if he goes at all) and still gets his pay. Run it like a normal business, if you don't work you go to work, you don't get paid

The USPS is operating too much like the Federal government and needs to make some changes. The Federal government thinks they can solve all their problems by raising taxes and the USPS thinks they can solve all their problems by raising postal rates. I think the USPS has priced themselves out of the ballgame. Their parcel post rates for packages over 2 lbs don't compete with the rates charged by Fedex and UPS. If the USPS would lower their rates in order to compete and if they would get rid of the unions that are forceing rates higher, I think they could make some serious progress.

Change home mail delivery to Monday, Wednesday and Friday only!

It seems my local Post Office window is closed when I go in to work and when I come home from work. How about having Tuesday - Saturday hours. That allows for customers who work during postal window times during the week to pick up/mail packages on Saturdays. I've tried to pick up certified mail/packages at my local Post Office on my lunch break to find the window is closed for their lunch as well.

Some towns have multiple Post Offices, they certainly can be consolidated.

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