• on Apr 9th, 2013 in Ideas Worth Exploring | 10 comments

    In 1963, the ZIP Code was introduced by the U.S. Postal Service as a means to deliver mail faster and cheaper. Fifty years later, this system has grown to provide unforeseen benefits as an infrastructure that enables commerce and organizes information. However, the ZIP Code was not universally accepted at the onset. To overcome skepticism from consumers and mailers, the Postal Service launched a creative outreach campaign led by a character called Mr. ZIP. This mailman caricature served as the primary advocate for the ZIP Code and increased public support for the idea enough to overcome the initial resistance from stakeholders. Below we interview Mr. ZIP to hear the story of the ZIP Code.

     


    As Mr. ZIP mentions in his interview, the Postal Service Office of Inspector General Risk Analysis Research Center has worked with IBM to issue a white paper entitled The Untold Story of the ZIP Code. This white paper explores the lessons learned from the creation of the ZIP Code and estimates an economic value for the ZIP Code of about $10 billion annually across the entire economy. Most importantly, the paper presents two enhancements to strengthen the ZIP Code’s placement in the modern world:

    • Combine the ZIP Code with the precision of geocodes (latitude and longitude coordinates)
    • Improve the ZIP Codes value in targeting by linking demographic information with the ZIP Code and Utilizing the full ZIP +9 or some variation to offer smaller mailing groupings.

    Combining the ZIP Code with geocodes could allow easier reconfiguration of delivery routes in real time as well as help align government in assisting disaster recovery efforts, tracking population “flight paths” to unaddressed areas, and increasing the capability to link demographics to unaddressed areas. Linking demographic information with the ZIP Code and offering smaller mailing groupings would improve target mailings. This would increase the value of mail for senders and receivers by connecting recipients with mail they want to receive and reducing less valuable broad mailings.

    What ideas do you have for enhancing the ZIP Code to meet the demands of today’s ever-evolving society? How might the Postal Service enhance the ZIP Code to gain internal benefits? What enhancements would place the ZIP Code in a better position to provide the innovators and entrepreneurs new capabilities to meet today’s demands?

  • on Mar 11th, 2013 in Ideas Worth Exploring | 8 comments

    The U.S. Postal Service adds more than 600,000 new delivery points each year, mostly in the form of new residential homes. While most new residences include cluster boxes rather than to-the-door delivery to reduce costs, delivery remains the Postal Service's largest cost center. Canada Post, which has suffered losses recently after years of profits, has introduced a $200 per address charge that it is assessing housing developers for installing community mailboxes. Canada Post claims the charge “is in keeping with how other infrastructure costs are shared by utilities and other services." Canada Post, which adds almost 200,000 new addresses a year, could earn tens of millions of dollars from the fee and it would offset the added costs of new delivery points. Housing developers in Canada have been fighting the charge, arguing that it is unfair to assess new homes only, which they say receive substandard delivery service compared to older homes and apartment buildings that get delivery to the door. In the United States, the Postal Service does not charge a fee to set-up and deliver to a new address. New delivery points are generally more profitable than old ones because they generate on average more volume and revenue and they cost less due to the increased use of lower cost options such as curbside and cluster boxes. Still, other utilities, such as gas, electric, and cable companies, charge customers a new service fee when they move or start service. Cities and counties also often charge an administrative fee for services, such as water, when a customer changes or adds a new address, sometimes in the $50 range. The City of Mountain View, CA, charges a hefty administrative fee of $195 to change or add a new address. Should the Postal Service recover the costs associated with new delivery points by charging customers a one-time “set-up” fee for their new home or business location? Or does that effectively penalize a new homeowner for receiving what is usually a more cost-effective form of delivery (cluster boxes)? If the Postal Service were to charge, should it only charge for the administrative costs it incurs to set up new addresses, such as completing and reviewing Postal Service forms and updating to the Address Management System and Delivery Sequence File? Should it charge the developer as Canada Post is doing? Or should it retain the status quo and keep it so that costs are shared by all ratepayers? Are there other solutions?

  • on Mar 6th, 2013 in Ideas Worth Exploring | 1 comment

    Powerful forces like globalization and the digital revolution are changing how, when, and where things are produced, purchased, and delivered. Look at how our shopping habits have changed in just the past few years. With your smartphone or tablet you can shop anytime, anyplace. Offshore production trends are reversing, and some manufacturing jobs are returning to the United States. And major urban areas continue to grow and link into a global transportation supergrid that connects people, commerce, and ideas. If you’re left off the grid, you could find yourself disconnected from the new global economy.

    The U.S. Postal Service Office of Inspector General recently released a white paper discussing the new logistics revolution and all the challenges and opportunities it presents — The Global Logistics Revolution: A Pivotal Moment for the Postal Service. The paper asks, in the face of all these changes, how can we make sure citizens and commerce continue to thrive? Perhaps postal organizations – here and around the world – have a key role to play. Some foreign posts already provide an array of logistics services ranging from comprehensive warehousing to customized, end-to-end cross-border and returns solutions that better serve customers and the new global economy. For some of these posts, these “value-added” logistics services are providing a new revenue stream to offset steep declines in traditional mail volume.

    The Postal Service is also well positioned to move into the large and fast-growing logistics market. With its extensive first and last-mile reach to nearly every household and business in the United States and mission to “bind the nation together” through communications and commerce, the Postal Service is unmatched in keeping communities connected. Either on its own or by partnering with private sector companies, the Postal Service could offer a range of new services and products to meet the evolving needs of citizens and business across the country. A service could be as basic as comprehensive track and trace to more complex offerings like warehousing solutions. If the Postal Service does not at least keep up with emerging customer expectations for improved and expanded logistics services, it could jeopardize its position in the evolving expedited and small package market.

    We encourage you to read the white paper to learn about how the Postal Service could respond to the Global Logistics Revolution and then weigh in with your thoughts below.

    Do you think that the Postal Service’s ability to offer new, value-added logistics services could help respond to customers’ changing needs?

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