• on Sep 24th, 2012 in Delivery & Collection | 3 comments
    The U.S. Postal Service recently reported that its third quarter delivery service performance results marked “all-time record service performance” across all mail categories. In particular, the Postal Service had significant improvement in delivery performance for its commercial mail products in First Class and Standard Mail. Periodicals’ on-time performance topped 80 percent for the first time since 2010, a major improvement over the 46 percent score from earlier this year. The improved service performance in the third quarter occurred while the Postal Service was in the process of consolidating 46 facilities, which some mailers feared would affect service. But initial reports suggest service has not been overtly disrupted by the consolidations, although the real test could come during the fall and holiday mailing seasons. The Postal Service recently completed this first phase of its network rationalization plan, and is now on a break from consolidation until 2013 after the election season. Postal officials have attributed the improvement in service performance to diagnostic tools that show “pinch points” and help managers to act on that information to reduce cycle times. The Intelligent Mail Barcode full-service data, which identifies many potential problems, is also helping and employees are doing outstanding work often under difficult circumstances. It will be important for the Postal Service to maintain strong service performance as volumes pick up during the fall mailing season and election mail is added to the mix. Further, the second phase of consolidations could begin in February 2013 and could have an impact on service. Finally, mailers report that they are not solely concerned with service scores but that the Postal Service delivers the mail as promised. What has been your experience with service over the past few months? Have you been affected by the consolidations? Are you concerned about phase two of the network consolidation plan?
  • on Apr 16th, 2012 in Delivery & Collection | 4 comments
    Starting in April, the private company TNT Post UK plans to test street delivery in the West End of London. Currently, TNT collects and sorts mail and then hands it over to Royal Mail, the traditional government-run postal provider in the United Kingdom, for final street delivery. Now, however, TNT Post UK wants to provide street delivery as well. TNT is seeking assistance from the UK government to provide a level playing field that will allow it to compete effectively with Royal Mail’s delivery service. Royal Mail says that rival delivery networks hurt mail customers by undermining the efficiencies of a single delivery network, stating "If a rival delivery service cherry picks profitable, easy-to-deliver mail, it will weaken and ultimately undermine the Universal Service that only Royal Mail currently has the ability and commitment to deliver..." Britain’s postal regulator, Ofcom, plans to monitor the situation. Overall, this move represents another step toward a liberalized postal market in the UK, similar to those in other European Union countries. What are the benefits and risks of promoting this type of competition in the delivery market? What could happen if a private company sets up a rival street delivery network that only served profitable areas, such as West End of London? Could the traditional provider, Royal Mail, compete in the more profitable areas if it also is forced to provide delivery services to less profitable addresses in rural areas?

    This blog is hosted by the OIG’s Risk Analysis Research Center.

  • on Feb 6th, 2012 in Delivery & Collection | 17 comments
    In an effort to reduce costs, the U.S. Postal Service has proposed cutting delivery service to five days per week by eliminating Saturday delivery. For a moment, let’s ignore the argument over whether the delivery days should be cut to five to ask another question: is Saturday the right day to cut? While the Postal Service says Saturday has the lowest daily mail volume, it is the one day when most people are home to accept their mail. Some mail recipients say that Saturday is the delivery day they would least like to eliminate. Many periodicals and advertising mailers value Saturday above all other days because their customers have more time to read their magazines and ads and are more likely to act on them. Equally important, busy households are also available to accept packages—a competitive advantage the Postal Service has over the competition. Lastly, eliminating Saturday delivery could further crowd post offices with customers retrieving their packages. In its recent filing with the Postal Regulatory Commission proposing the end of Saturday delivery the Postal Service did not cite the impact on service of having two consecutive non-delivery days (such as Saturday and Sunday). Eliminating delivery on Saturdays or Mondays could slow service more than eliminating it on some other day. For example, let’s take a product like Priority Mail or First-Class Mail that we will assume takes exactly two days to be delivered after it is deposited. Since the Postal Service does not accept or deliver mail on Sunday, the current average delivery time would be 2.17 days. If you end delivery on Saturday, the average delivery time would increase to 2.50 days (pieces sent on Friday and Thursday would take 3 and 4 days respectively). Alternately, ending Tuesday service would keep the average delivery days at 2.17. So ignoring the argument over whether it makes sense to convert to 5-day delivery, would it be better to cut Saturday delivery rather than some other day? Are there better options? Would it be possible to end Saturday delivery for business addresses while eliminating Tuesday delivery for residential addresses instead? Tell us what you think.

    This blog is hosted by the OIG’s Risk Analysis Research Center.

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