• on Oct 31st, 2009 in Delivery & Collection | 65 comments

    In these challenging times, reducing the cost of delivery operations — one of the Postal Service’s largest expenses — could save millions. One option the Postal Service is considering is to discontinue Saturday city and rural delivery and collection services.

    Saturday is said to be one of the lowest mail volume days. It’s also a day when many businesses are closed. The September/October 2009 digital issue of Mailing Systems Technology included a survey of managers working in the mailing industry. Of those surveyed, 98 percent said changing to 5-day delivery would not require a change in staffing. The survey results also indicated that most managers surveyed (81 percent) preferred Saturday as the day of the week that the Postal Service would stop delivering mail. An additional 62 percent of the managers surveyed felt that once implemented, there should be no exceptions to 5-day deliveries such as for holiday weeks or high-volume mailing periods.

    Gallup also conducted polls on ways to help the Postal Service solve its financial problems. They found that 66 percent of Americans supported reducing mail delivery days from 6 to 5 days, and 66 percent also supported reducing the number of days the Post Office is open from 6 to 5 days.

    The Postal Service is currently studying the reduction of mail delivery from 6 days to 5 days. Should the Postal Service consider eliminating delivery, collections, retail, and remittance services only for delivery units with low mail volume? Should the Postal Service eliminate these services for all delivery units nationwide?

    This blog is hosted by the OIG's Delivery directorate.

  • on Oct 26th, 2009 in Delivery & Collection | 27 comments
    Providing mail delivery is central to the Postal Service’s mission.  Delivery is the Postal Service’s largest operational function and accounted for approximately one-third of its nearly $78 billion in total expenses during 2008.  Postal Service management is working hard to reduce delivery costs while continuing to deliver to 149 million[1] addresses in the most efficient manner possible.  Despite declining mail volumes, the Postal Service is challenged to provide cost efficient and effective service to a delivery network growing by more than 1 million addresses each year. The mode of delivery plays an important role in determining the cost and efficiency of delivery.  The Postal Service provides three modes of delivery for existing delivery points — to the door, to a mailbox on the curb, and to a centralized point that serves several addresses.  Door-to-door delivery is the most costly mode and is no longer available for new delivery points.  When new developments are established, curbside and centralized deliveries are the only options.  Since centralized delivery is the cheapest mode, the Postal Service favors installing centralized delivery.  However, the decision on mode of delivery is sometimes left to the developer. Curbside delivery is the most widely-used mode of delivery for residential delivery points.  As of September 1, 2009, there were 49 million curbside delivery points.  The second most utilized mode of residential delivery is “other” which includes door-to-door.  Table 1 below shows the total number of possible residential deliveries by delivery mode. Delivery Table 1 For business delivery points, the “other” mode of delivery, which includes door-to-door, is the most utilized mode with 5 million delivery points as of September 1, 2009.  Table 2 below shows the total number of possible business deliveries by delivery mode. In response to decreasing mail volumes and revenues, the Postal Service needs to make every effort possible to decrease the cost of delivery operations.  Although the Postal Service’s goal is to maximize the use of centralized delivery with the developer’s input, this is not always possible.  Additionally, existing costly delivery points could be converted to more cost effective modes. Delivery Table 2 What do you think? Is the Postal Service making every effort to promote centralized delivery in new developments and convert existing costly door-to-door and curbside deliveries?

    [1] This number includes delivery to all residential, business, and Post Office box addresses. This topic is hosted by the OIG's Delivery directorate.

  • on Jun 8th, 2009 in Delivery & Collection | 78 comments

    It’s 7:30 am and you’re a letter carrier . . . so take a moment and imagine the following as a typical workday. First, you walk into the office, clock in, and check in with the boss. Then, you load up the vehicle with the mail that is already prepared for your route. Finally, at 7:45 am, you jump into the vehicle, drive off and begin delivering the mail. At no point are you required to manually sort mail. Is that day far off in the future . . . or, is it just around the corner?

    Currently, Delivery Point Sequence (DPS) letters are automated to the delivery point so that the carrier can take it directly to the street. DPS mail is picked up by the carrier on the way to the vehicle and does not need additional manual sorting. The purpose of the DPS program is to reduce the amount of time carriers spend in the office manually sorting letters, thereby reducing cost and improving accuracy and speed of delivery. Since 1993, when DPS was introduced, the share of city delivery routes receiving DPS letters has grown to more than 99 percent and the share of rural routes has grown to 86 percent. On average, these routes receive 88 percent of their letters in DPS order. The Postal Service’s goal is to raise the DPS percentage to 95 percent by 2010. The chart below depicts how the share of DPS letters and manually sorted (cased) letters on city delivery routes has changed over time.

    Delivery is the Postal Service’s largest cost center accounting for more than 40 percent of expenses, and having carriers manually sort mail takes time and money. Carrier routes are configured to take eight hours to complete, and those eight hours include time spent in the office . . . primarily manually sorting mail, as well as time spent on the street. According to the Postal Service, over the last 15 years, it has recognized over $5 billion in savings due to DPS.

    Now, the Postal Service wants to replicate for flats — large envelopes, magazines, and catalogs — what is done for letters by implementing the Flat Sequencing System (FSS). The FSS will sort flats into delivery point sequence. In FY 2007, the Postal Service processed 52 billion flats and 80 percent needed to be sorted manually in the office by the carrier. The plan is for FSS to reduce the amount of time carriers spend in the office manually sorting flat mail. Although FSS is not quite ready for primetime, the Postal Service is currently piloting it at the Dulles Processing and Distribution Center in Virginia.

    If the majority of the mail is sorted in delivery point sequence using automation, it will dramatically change how a carrier spends his or her workday. Remember, you are the carrier and now you have automated sorted bundles of DPS letters and FSS mail. There was no need to manually sort any of this mail in the office. You only had to pick up the mail and maybe a few parcels before you headed out on your route. What does this mean? Well, for starters, because carriers begin delivering mail earlier, carriers have a longer day out on the street. In addition, more time dedicated to delivering the mail will likely result in carriers being back in the office within their allotted 8-hour tour, thereby reducing overtime and late deliveries. Further, avoiding the evening rush hour traffic may result in decreased auto accidents. Finally, because the mail is delivered more quickly, customer service may be improved.

    What do you think? Do you think that the days of manually sorting mail in the office are coming to an end? It took 15 years to realize the impact of DPS; will it take longer for FSS? Will increased delivery points and decreased mail volume have an impact? Can you think of some other challenges and benefits that may be presented because of DPS and FSS?

    This blog is hosted by the OIG's Delivery directorate.

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