• on Jun 24th, 2013 in Strategy & Public Policy | 5 comments

    The U.S. Postal Service is in the middle of a difficult transition to position itself as a 21st century communications provider. The Postal Service sees new opportunities, but its current cash shortage makes it difficult to invest in modernizing aging facilities and vehicles, or developing new products to serve changing communications and delivery needs. Public-private partnerships (PPPs) are an increasingly popular way for governments to achieve policy goals and develop infrastructure, while shifting short-term financial burdens away from taxpayers and strained government coffers. 

    Unlike a traditional procurement, in a PPP the private sector partner usually shares in the risks and benefits of the project. For example, a company could build and manage a toll road under a contract with a government transportation agency, and recoup its investment by collecting tolls. In the postal sector, a common PPP is for entrepreneurs to manage post offices. The Postal Service has entered into similar partnerships through its contract postal unit program and agreements with several retailers. Some foreign postal operators have gone further by having all or almost all of their post offices run by private partners. If the post office ends up earning less revenue than projected, the postal operator avoids being stuck with a money-losing facility.

    The Postal Service Office of Inspector (OIG) recently released a white paper entitled Public Private Partnerships: Best Practices and Opportunities for the Postal Service. The white paper recommends that the Postal Service consider opportunities for new PPPs to generate cash, reduce costs, make spending flexible so it varies along with volume, and leverage private sector expertise in developing new products for the digital age.

    This white paper reviews lessons learned from PPPs in the international postal sector and from nonpostal U.S. government agencies. Despite PPP’s potential benefits, government agencies should perform careful analysis before entering into one, as they usually involve higher long-term project finance costs in exchange for increased flexibility and risk-sharing. Over the years, government agencies have developed a set of best practices to ensure that a PPP is a good deal for the public. One common lesson is that there are significant benefits to creating a central office to facilitate PPPs, coordinate with private entities, and to collect and share best practices throughout an agency.

    Do you think these types of partnerships would benefit the Postal Service? From your experience and observations, which partnerships have been helpful to the Postal Service and its customers? What specific opportunities exist for additional partnerships between the Postal Service and the private sector? Are there any downsides to such partnerships? 

  • on Apr 19th, 2011 in Ideas Worth Exploring | 14 comments
    Although the digital option has grown as a channel for Americans to communicate, purchase, and store personal information, there are drawbacks that leave a significant portion of the population underserved. To meet the population’s needs and “bind the nation together” in a digital world, the Postal Service must modernize its role. The U.S. Postal Service Office of Inspector General Risk Analysis Research Center has completed Part 2 of a series on the Postal Service’s role in the digital age. Building on the first white paper which explored the facts and trends impacting communications, The Postal Service Role in the Digital Age – Part 2: Expanding the Postal Platform, presents a strategic positioning framed by three guiding principles: •Promoting solutions for the communications problems of the digital age •Using the core competencies and assets of the Postal Service •Considering the policy implications of the strategy based on the current legal and regulatory environment Using an “eMailbox” that links a physical address to an electronic mailbox for every citizen and business, the Postal Service could build a digital platform that supports communications and commerce for postal, governmental, and commercial applications. The paper provides six additional initial applications for consideration, including: •An eGovernment application that promotes the expansion of government services throughout the postal platform and uses the eMailbox to send and receive secure and official communication with federal agencies. •Tools for identity validation, privacy protection, and transaction security that allow users to verify the individuals and businesses they are communicating with, the safety of their personal information, and security of their purchases and financial transactions. •Hybrid and reverse hybrid mail that allow senders and receivers to convert digital documents to physical and physical documents to digital. •Enhancing services for the shipping and delivery of secure online purchases through flexible pick-up and delivery options, expanded payment choices, and a cost calculation that includes all charges and fees for purchases (even international) at the time of sale. •Digital concierge services that use the eMailbox to integrate an individual’s physical and digital communications in a single place. These services act as a type of secure “lock box” and help manage the “information overflow,” providing quick access to important communications and other personal documents (such as medical records and wills). •Develop a network to buy and redeem cash and digital currency at Post Office™ locations and online. To learn more about the strategy and specific areas the Postal Service should consider, click here to read the paper. Do you think the Postal Service has a role in the digital age? Would you use any of these applications? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Feb 24th, 2011 in Ideas Worth Exploring | 5 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] H [/dropcap]ow has the digital age changed your life? Do you still shop in a store or buy online? Get the newspaper delivered or have an online subscription? Read hard copy books or use an e-reader? If you chose the digital options, you are not alone. You may be a digital native, one of those who are most comfortable working in a digital environment. The Internet and the digital economy are fundamentally changing communications, transportation, and commerce. This “digital revolution,” in combination with the great recession of 2008 to 2009 has affected postal operators all over the world causing a steep decline in the volumes of personal, business, and advertising mail. This shift from the physical will only accelerate as digital natives become more prominent in the workforce. In a white paper released today, the Office of Inspector General analyzed the changing digital landscape as the first in a series of papers on the Postal Service role in the digital age; here is a sample of the key trends: 1.There is a progressive shift from the physical to the digital by business, government, and consumers. 2.Control has shifted from the sender to the receiver. 3.The Internet has evolved from mass broadcast media to personalized conversations. 4.Explosive growth of mobile devices increases consumption of content “on the go”. 5.E-commerce is growing rapidly but has not reached its full potential. 6.Mobile commerce is positioned to grow significantly in the U.S. market. 7.Digital technologies have facilitated global commerce. Though there has been a rapid shift of communications and commerce from the physical world to the digital, there are shortcomings and fundamental gaps that prevent all U.S. consumers from migrating into the digital world. They include: •The Internet and all of its functionality is not available to all citizens to reap its economic benefits. There is a lengthening tail of digital refugees, which will only increase as the digital revolution progresses; •There is a potential threat to the principle of “network neutrality,” nondiscrimination in access to communications networks; •There is still a lack of an adequate level of privacy, confidentiality, dependability, and security in digital communications and transactions as desired by citizens, with the potential of involuntary profiling of consumers; •The digital infrastructure has limitations in connectivity and bandwidth, provided by companies that could go out of business at any time; •There are inadequate personal information management tools to effectively deal with the increasing volume of electronic communications and applications; •There is still insufficient availability of affordable digital currency and secure and convenient financial tools to transact online; and •There are limits of choice, even withdrawal of the physical option as companies push consumers into digital-only communications. Given the Postal Service’s role as a trusted intermediary in the physical world, what role do you believe it should take in digital world, if any? Give your comments below. To learn more, click here to read the paper. [retweet] This topic is hosted by the [tooltip text="The Risk Analysis Research Center (RARC) conducts research on economic, business, and policy issues related to the Postal Service. RARC's staff includes experts in economics, operations research, and data analysis."] OIG’s Risk Analysis Research Center (RARC). [/tooltip]