on Apr 26th, 2010 in OIG | 195 comments
 
The debate about the Postal Service’s future is heating up and Pushing the Envelope is interested in your views. Last week the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security held a hearing on the Future of the Postal Service. The week before there was a hearing in the House on the Postal Service’s financial crisis and future viability, and on April 12, the Government Accountability Office issued a report laying out the strategies and options to maintain the Postal Service’s viability. Some of the strategies under discussion include: • Ending Saturday delivery. • Reducing the size of the workforce. • Making postal employees pay the same share of health and life insurance premiums that other federal employees pay. • Generating revenue through new products. • Allowing the Postal Service more pricing freedom. • Restructuring the Postal Service’s network of mail processing facilities. • Moving retail services from Post Offices to alternative access options. One item that is generating a great deal of discussion is whether the large payments the Postal Service must make for retiree health benefits should be restructured. One option is to give back some of the excess pension funding and allow the Postal Service to use these funds for other purposes. In January, the Office of Inspector General for the Postal Service issued a report that found the Postal Service had been overcharged $75 billion for its pension obligations from 1971 to 2009 because of an inequitable method of calculating the size of those obligations. Adding to this inequity is the fact that the Postal Service is currently required to fund 100 percent of its retiree health and pension obligations. Very few in private industry do this, and the rest of the federal government’s pension funding level is only 41 percent. In addition, the OIG believes that the forecast of the Postal Service’s future retiree health care costs is too high. Fixing these issues could save the Postal Service $7 billion a year. What do you think? Which strategies will be most useful to the Postal Service? Should the mix of strategies include cutting delivery service?
 
This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

Comments

If the postal service didn't have this astronomical debt all these years, perhaps they wouldn't be cut to the bare bones where they really need people. Although the lack of staff forces management to be more efficient, it also provides opportunity for errors.

Several thoughts. Close the small town post offices that are within 10 miles of another post office.

Stop delivering to houses, and instead put in banks of mailboxes. That way one postalworker can do the work of 10. It's much more efficient.

Charge the first class rate for junk mail.

Stop FREE DELIVERY.
Charge a monthly PO Box rate for all customers delivery whether they rent a box or not.
Let each customer have option of paying a Box rental or pay the same as a delivery charge.
This will do 2 things:
1. Cut down on total deliveries
2. Help pay the expense of delivering mail.

Create a bill pay option on the USPS website.

If you would just start some of this stuff already you could save some money. The way you handle this stuff it cost more to implement than you save. Typical bureaucratic waste.

The postal service is missing a great opportunity to provide and 'official' email service. Every citizen and organization could register for an official USPS email account that would be theirs forever. It would serve as an email equivalent of certified or registered mail. Sending something as certifiied emailing from a USPS account to another USPS account would an official communication. In exchange for this imprimatur, the USPS could charge a small amount for these official emails.

I believe that users would like to have such an official email service. I am confident that it could be structured in a revenue producing way.

The most obvious way to reduce postal system costs is by eliminating Saturday delivery. Given the reduced importance of physical mail to the vast majority of people, this is something which is overdue.

Meanwhile, you could improve revenues by being more agressive with your small parcel rates. The post office should have a big cost advantage over UPS for small package residential delivery because you already go to ever house every day. Press that advantage and take market share!

Here's some possible solutions for the United States Postal Service as it gets out of red ink.

1. Quit overfunding the pension plan. Most mines can't even get their pension plans funded.

2. Do something similar to the UPS Store where people can photocopy documents, package items to ship, etc.

3. Innovation at Mail Processing Centers. Why should an item I mail to US Bank in Hibbing take 2 days when it should only take a day.

4. Don't treat newspaper carriers like they are criminals. They are just doing their job for the newspaper that the carrier has a contract with.

5. Learn to be competitive with the likes of internet bill pay.

The founders of this country knew that a postal service was a necessity that cannot be run for profit, or even "break even" - that is why the US Post Office was setup as a subsidized federal government agency with only a partial offset of expenses by postage fees (stamps). Apparently, people today think they are smarter than the founders and can turn a profit with USPS.

It's about time to cut wages and benefits.

Why not eliminate delivery to a person's door? I grew up with mailboxes and now have delivery to my door. If all mail was delivered to boxes it would allow each postal carrier to be much more efficient and deliver to many more doors each day. This could save a large amount in employee costs.

1. my town has two post offices. WHY?

2. Every other day delivery. IE. deliver on mon, wed, fri one week. tues, thurs, saturday the next week for half of the area one post office covers, reverse for the rest of the area. So carriers will still be working the same hours but there will be 50% fewer needed though. That would undoubtedly make some customers heads explode but I know I would be fine getting my bills a day late.

3. Really rural area's deliver once or twice a week, but have the option for people to come in and pick up their mail

4. Figure out what people would be getting paid if their jobs were out in the real world, and pay them all that rate. whats a carrier start at $25/hr? it would be 10 out in the real world.

5. I'm not sure who's running the post office but they should be informed that all these postal jeeps don't need to be replaced when one gets a scratch. All I see out is brand new Jeeps. There is something called maintenance, and I am almost certain it is somewhat cheaper then buying new jeeps yearly.

Eliminate ALL Saturday delivery EXCEPT for Express/overnight items & close ALL small town post offices on Saturdays. Most of our neighborhood's mail on saturdays is junk mail/ad flyers in any case.

I think it's time to let the commercial industry take over the mail delivery. All I get anymore is junk mail that goes straight to the recycle bin. All my bills are electronic. By allowing commercial companies deliver, we'll put more money back into the economy and create competition. We might even cut down on that jun mail...

1. Stop "Free" packaging (mainly the boxes) for priority/express mail. Charge a minimal charge for these, and allow the flat rate envelopes to continue to be free.

2. Reduce the number of post offices greatly. Small towns only need one!

3. Create one stamp only (ie. the forever stamp), I'm sure it's pretty expensive to print all the different character stamps,. This would help out people, and you wouldn't have to print make up stamps every time the USPS changes rates.

4. Open more automated postage centers, and allow them to take cash.

Educate public to reduce junk mail.

Door to door delivery is currently 'grandfathered' to older communities, but newer communities are required to receive mail at ganged mailboxes. Everyone should be treated the same. Requiring customers in older communities to convert to ganged mailboxes would be a step in providing non-discriminatory service as well as a way of reducing cost.

I do feel for the workers, but to save their jobs and avoid pink slips, they should #1)take a pay cut. Jason is right, what do they start at $25. That's a lot higher than most. #2) They get full paid medical and retirement? Definitely they should start kicking in for some of that.

Ways to fix the USPS deficit:
1) charge the same for junk mailers that we customers pay (first class rate). Junk mail is mostly thrown out anyways, so it would help the environment, increase income, decrease amount of mail matter (due to cost increase)
2) deliver mail three days a week (M-W-F). That would bring great savings in fuel/transportation and it would not have much of an effect on customer satisfaction level.
3) close post offices that are not making enough money to pay for themselves and better staff the remaining ones with public attending staffers (not internal positions). This rule should not be allowed to close the only Post Office in small communities above a certain pre-defined population size.
4) Allow for the mailing services to be fulfilled by 3rd parties (a grocery shop or even a private post office) for the front office, and only provide delivery by the USPS. This would resolve the small community problems with the post office closing.

I am pretty sure that raising the stamp rates will not help. The increased cost of the postage rates combined with email has created this mess. I agree that creating one stamp would reduce the costs. I know there are stamp collectors out there but imagine how your current stamps value would increase if they only offered one stamp for now on. I live in a small town and we only have one post office. It isn't feasible for me to drive to the post office to pick up my mail as by the time I get off work...it is closed. I think every post office across America should be closed on Saturdays, cut back wages and produce only the one stamp. Maybe if they pay a mileage fee to the deliverers while have the worker drive his own car with a USPS magnet on the side and stop buying USPS trucks/jeeps... money could be saved.

- This is what they do in Finland:
http://www.popsci.com/technology/article/2010-04/finland-open-scan-and-electronically-send-snail-mail

People should have the option to opt in, or opt out again of this kind of service. When people fill out a change of address form, it should be mandatory for six months (that they get their mail scanned electronically and sent to an email address the Post Office sets up). All of the paper (even the envelopes) the Post Office scans, cross-cuts, and shreds, can be sold in bulk to a recycling center.

I understand how this could be a problem for people concerned about privacy, but this is the age we live in now... everything's computerized.

- You can also sell these to the poor, people still not in cyberspace like the rest of us (elderly):
http://www.pcworld.com/article/128066/print_email_and_photos_without_a_pc_or_net_connection.html or set up a similar service.

- Also, experiment with mixed-use Post Offices, i.e., it's not just the Post Office, it's also the neighborhood ___________. I'm going to leave this open to interpretation. Maybe an Urban Anthropologist can help out with this one. Think outside of the box (no pun intended).

-G

Having been a career postal employee for over 25 years, I can tell you that many of the changes that have been proposed are a lot easier said than done. The postal service has entered into various collective barganing agreements (labor contracts) with the unions. As poor as many of those agreements are, they are legal commitments and the postal service has to restructure within those those agreements and make changes when and where they can. When I started with the PO, I took a lower paying job than I was offered in the private sector, for the security of continued employment and a government pension. I also paid a price in the way of abusive work enviornment, shift work, etc. I do not know what a new employee makes today, so I can not comment as to whether it is excessive or not, but we pay a portion of our health and retirement benifits, just like other government workers. In fact, I pay more and get less coverage than anyone I know in State or Local government. The days of superior federal benifits is just a legend. It has been for years.
You want to improve and steamline the Post Office?
-Consider 5 day delivery.
-Return to core services. Enough of this confusing price and service structure. It works for car dealers and cell phone providers, but has no business in a government service.
-Do not close post offices arbitrarily, but close them in a manner that supports the community.
-Consider offering space and/or services for other government agencies and be compensated by those agencies.
-Stop promoting or hiring managers that do not have basic business skills, and remove abusive management.
-And perhaps most important; Manage with a business plan. Do not simply demand change without giving your staff the tools to acomplish it. (Polititians have demonstrated this error to all of us) For example, make sure new technology works before making sweeping changes to staffing, don't sell property for a fast buck just to lease more property for all time to come.
Believe it or not, the small town Post Office, in many towns is a hub, an anchor in the community, and has an important role. We should get back to out core business, do it right, and regain more of the trust of the public. We might even find some increased business along the way.

DO NOT CLOSE SATURDAY.
It is the only day I can pick up packages since the P.O. is otherwise only open during regular working hours. It is like you WANT to drive my non-letter business to UPS or Fedex.

- Shut down one day a week, Wed. would be good.
I need to pick up packages on Sat. since they are closed while I work.

- Require PO boxes for streets with less than X houses. Residence per mile yardstick.

- Require Gov vehicles and not subsidize personal vehicles in rural areas. Per Diem rates are a bonus to most delivery staff.

I say these things living in a rural state, so I might even end up being one who has to get a PO Box.

Let's face it, USPS missed the boat on e-mail and the rate increases are not working. I suggest holding or lowering the rates, and what about acting as a payment center (think paypal). But the most important and strategic step is to lesson the benefits USPS workers receive. Labor and benefits is the key.
25% premium for hours worked on Sunday?
Life insurance fully paid by USPS?
Retirement as part of the federal government program?
20 days of leave after 3 years of service?

Tackle these and the USPS will be more efficient and less costly to operate.

No Sat delivers. Carriers still get 40hrs. less sick calls. More family time. 2 night 3 day trips.
Put KIOS UNITS at all Walmart, Target, Costco Shopping Malls, Convention Centers and Major Sporting Events and Military Bases.This would put less people in line waiting.
Advertise on Postal Vehicles. Just like race cars.
All Postal employees need to multi task.
Carriers need to grab pick ups with in a 2 mile radius coming back to office.
Carriers need to have cell phone avalible to costmers for pick ups. I can say allot more but....
Union and Management need to be on the same page on change...

I get *so* much unwanted junk mail that goes immediately into the recycling, unopened and unread. Is there any way to increase the cost for sending junk mail? Why does a hand-written letter or account statement (mail that I want to receive) cost the first-class rate, but so many flyers and credit cards promotions get bulk mail rates?

You should scan entire catalogs for corporations, and convert them to PDF files for a fee. Instead of sending out physical catalogs, you can send emails with the PDF attachments. It saves on paper and chemicals. It's better for the environment.

One unique web service the postal service can provide is a personal certificate service. Such a certificate can help people to verify that a person lives at a particular physical address.

One way to make this work is like: upon request, the PS sets up accounts for a resident, and gives you a password in the mail. The resident can log in to the server, pay a small fee (per transaction or per annual), and get a link to send to someone (a person or a business). This is different from other personal certificate services, because the PS is in a position to verify your home address, not just your email address.

Even more drastically, the PS can offer email! The difference is again that an email from the PS can ascertain the person's physical location. Once a person subscribes to email from the PS, the paper junk-mail can be switched to e-junk-mail, which is much easier to recycle, and saves the PS time/cost/fuel.

Either eliminate bulk rate or eliminate junk mail. Eliminating the rate would cause advertisers to reconsider and reduce junk mail while increasing revenue per parcel. Eliminating it all together would be the greenest idea and would reduce the overall amount of mail considerably allowing further reduction in costs and infrastructure.

Unintended consequences:: No Problem with eliminating saturday deliveris that I can see EXCEPT

Credit Card companie will be quick to penalize cardholders for not sending in their payments as that extra day out of mail service can have a detremental effect on receivables..This is something Congress will have to address if in fact Saturday is eliminated as a mail delivery day.....

Discontinue Saturday delivery, we will adjust to
credit card issues, and remove retail stores from
Postal Offices.

Value Streaming and use of Proof Point Software would take a lot of the guess work out of finding the optimum savings.
John

I say have the workers work longer hours and less days (ie. 4 10 hour days) with longer hours, people wouldnt need a saturday post office day because it would be open later for more people.....also it cut costs to maintaining the building where the workers are(electricity, heat, A/C)...thats my theory....

My suggestion is for the post office to only deliver three days a week. Mon/Wed/Fri for my neighborhood, Tue/Thu/Sat for the next neighborhood. This should cut staff, vehicle requirements, fuel, etc... Maybe even twice a week, three neighborhoods. I wouldn't mind it and all I talked to agreed.

In our little city of fewer than 2,000 people, some people have their mail delivered, and some of us have to go to the post office and pick up our mail! I have always thought this is a ridiculous set-up! Why not deliver ALL of the mail to our home addresses, and there might not be a need for a post office at all. There are porbably at least 4 other post offices in this county, and it seems to me that if we all had our mail delivered, most of those post offices could be closed and eliminate the maintenance, salary of a full-time employee there, etc. I don't have all the answers, but surely do think it's unfair that some of us don't have the mail delivered and people 2 blocks away do have home delivery.

I would love to know how much the postal workers behind the counter in the post office make in terms of annual salary and benefits.

Most if not all stores in the public sector have lower wage earners sitting and ringing up customer orders including Federal Express and UPS (both profitable). To have a high wage earner sitting there doing work a part time employee can do easily is not financially responsible.

My local post office has at least two employees sitting there all day... I am sure this reflects at least close to $150,000 per year (probably more) in just salary not to mention all the other benefits. Pay 2 people $15 per hour equals $62,400. Am I missing something or is there a special skill to putting a stamp on a package?

What you need to do is follow your carriers during their day and take a look at your personnel at USPS locations. I can't tell you how many times I've come home and my carrier is parked under my front yard tree talking on their cell phone. Cell phones shouldn't be allowed to be used except in case of emergency or on breaks during business hours. And the people manning the USPS locations, excluding 1 or 2 that I've seen in the last 20 years, are the slowest, least customer oriented, least friendly people I have ever dealt with; including State & County employees. You need to take a look at your workforce and make your changes there. I could work circles around 99% of the Postal employees, and I'm over 50!

Deliver mail every other day, with alternating M-W-F and T-Th-Sat routes. One carrier can cover both a M-W-F and a T-Th-Sat route, cutting the need for carriers in half and reducing fuel and vehicle costs.

If the usps would investigate the possibility of having centralized mail pick-up ponts,and stop delivering,cost cuts would involve:staffing,vehicle procurement,and upkeep costs including fuel.while this may not be viable in all ares,it's application could help in some.

Saturday mail is a luxury as far as I am concerned. Can you go to the DMV on Saturday or any other federal agency for that matter. Drop the Saturday delivery and move on with it Please.

Let's realign the benefits to be commensurate with the packages provided by other federal and state employee organizations. At this current date, no company can maintain dynamic strategy when expected to pay 100% of all benefits. May need some grandfathering for change, for those who perhaps did not expect it. I also like the idea of eliminating one day of service, but thought the previously discussed Wednesday vs. Saturday made more sense. Less of an interruption than 2 days in a row.

eliminate monday delivery but keep saturday delivery..consolidate your offices into one main depot like ups and fedex. team up with the ups stores and sell your services there as well.

I really think we need only mail delivery on monday, wednesday & friday. That should take care of some of the junk mail & the bills that would be coming due.

The reason revenue is down for the USPS is, simply put, "the customer service stinks". My regular carrier works Saturdays leaving a Wednesday or Thursday as part of his weekend. In turn, the replacement carrier just can't get it right....mail either not belonging to me ends up in my box or mail belonging to me doesn't...mail partially opened or in poor condition or simply ripped open also manages to slip through...30 years at the same address....go figure...I say KEEP SATURDAY DELIVERY, GET RID OF ALL THE OTHER DAYS, that's just my suggetsion...we can live without the postal service...the only thing really be delivered is junk mail anyway.....

eliminate the union

Saturday delivery is not necessary. This is a good place to make cuts.

Why not cancel both Wednesday and Saturday. I don't receive anything that I can't wait an extra day for.

Junk mail is the biggest issue I think. I throw away at least 90% of the items I get every day. It's not mail I've asked for, yet I can't prevent it from being delivered.

Take a look at http://donotmail.org and http://donotmail.com . What we need is a national registry where all marketing companies both national and local must take part in the database. If anyone wants to mail me, I should be able to go to a single USPS management page and restrict them from doing so.

I don't know if it is profitable or not for the USPS to be delivering garbage to me, but it should be my right to not have anything delivered that wastes me time and fills up my trash can.

Do away with uniforms! they are expensive and all that is needed is ID tags or badges!

get rid of wednesday delivery. also quit sending trucks out with only 12,000 to 15,000 pounds of freight. they can haul 45,000 and still be legal. i know you have contracts that the trucks have to run. so i suggest to extend delivery by one day to give extra time to add more weight to a truck before letting a driver come pick up a truck with only 1/4 of a load on it. add more drops to trucks to add more weight and less trucks you have to pay for. this will cut your cost of moving the mail internally should see around 25 percent savings of cost doing this. make your contract haulers to be in a set area not just a set post office. in other words they can go up to 500 miles from a set DC center and post office instead of just one post office. you should see a huge cost savings by better routing.

Pages

Add new comment

This site provides a forum to discuss different aspects of the United States Postal Service and how it can be improved. We encourage you to share your comments, ideas, and concerns.

This is a moderated site—we will review all comments before posting them. We expect that participants will treat each other with respect. We will not post comments that contain vulgar language, personal attacks of any kind, or offensive terms that target specific individuals or groups. We will not post comments that are clearly off-topic or that promote services or products. Comments that make unsupported accusations will also not be posted.

We ask that reporters send questions to the USPS OIG Media Office through their normal channels and refrain from submitting questions here as comments. We will not post questions from reporters.

We recognize that the Web is a 24/7 medium, and your comments are welcome at any time. Given the need to manage Federal resources effectively, however, we will review comments and post them from 9:00 a.m—5:00 p.m Eastern Time, Monday through Friday. We will read and post comments submitted after hours, on weekends, or on holidays as early as possible the next business day.

To protect your own privacy, and the privacy of others, please do not include personal information or personally identifiable information such as names, addresses, phone numbers or e-mail addresses in the body of your comment.

Except when specifically noted, any views or opinions expressed on this forum (or any other forums available via an RSS feed) are those of the individual bloggers. The views and posted comments do not necessarily reflect those of the U.S. Postal Service Office of Inspector General, or the Federal government.

Thank you for taking the time to read this comment policy and disclaimer. We plan to blog weekly on as many emerging new media topics as possible. We encourage your participation in our discussion and look forward to an active exchange of ideas.