• 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 Jan 9th, 2012 in Ideas Worth Exploring | 6 comments

    Traditional addressing systems rely on subjective identifiers like street names and business or residence numbers. These addressing systems have generally offered the U.S. and many foreign postal services an effective means to identify pickup and delivery locations. However, recent technological innovations related to digital mapping have led some to consider the adoption of an addressing system based on geocodes.

    Unlike traditional postal codes, such as a ZIP code, a geocode is not a subjective descriptor, but a series of letters and/or numbers based on the physical location, or latitude and longitude coordinates, of a business, residence, or even point of interest. For example, under a geocode system, location of the USPS OIG headquarters may be identified by a single number such as 35602.1092.4393 which contains information about the latitude (38° 53' 45.996") and longitude (-77° 4' 14.6784“) of the building.

    Developing a geocode addressing system could have many benefits. Notably, it could provide every location in the world an internationally unique and permanent “address”. Such a system has important economic implications. Beyond supplying a physical address to residents and businesses located in countries without addressing systems, a common global standard could greatly facilitate international communications and transactions.

    This is particularly true as e-Commerce continues to grow across borders and the need for an addressing system that transcends national mailing standards and cultural and language barriers becomes more apparent. A geocode system may also complement the traditional street address system by providing more precise location information in cases where the location to which a package is to be delivered does not have a unique address, such as a specific room or cubicle.

    What do you think? Would geocoding improve the current address system?

    This blog is hosted by the OIG’s Blog Team.