• on Aug 5th, 2013 in Delivery & Collection | 2 comments

    Global e-commerce sales topped $1 trillion for the first time in 2012 and they are expected to grow another 19 percent this year, according to data from research firm eMarketer.com. While North America leads the world in online sales, Asia is expected to take the mantle by the end of this year. China drives Asia’s growth and this year it should surpass Japan as the world’s second largest e-commerce behind the United States and its $385 billion in online sales.

    This global boom in e-commerce has helped to fuel growth in the package delivery market, prompting the shipping giants, including the U.S. Postal Service, to jostle for shares of this market. The global e-commerce surge has also benefited American companies, who are looking to foreign customers to expand sales and revenues. Surprisingly, a number of well-known retailers only began offering international shipping from their websites a few years ago, including Macy’s, Williams Sonoma, J. Crew, and Crate and Barrel. One reason for the late entry is that shipping beyond the United States is not so simple. As a New York Times article noted last year, the problems include customs, addressing, and postal and shipping fees. In some cases, the cost to ship the package could double the total cost of the order.

    Another hurdle is package returns. Even as retailers figure out how best to reach their overseas customers, they are discovering that customers find it difficult to return packages. The Postal Service recognized an opportunity to simplify that process for online retailers and later this month it will begin a market test of a new international e-commerce return service. International Merchandise Return Service will allow foreign consumers to return unwanted products purchased from American retailers’ websites back to the U.S. The service creates return labels with postage payment, allowing the buyer to print off a label and return the item through the post.

    Modeled after its domestic returns service, the Postal Service expects International Merchandise Return Service to simplify international returns for customers and improve their overall experience, which should encourage even more online shopping. The Postal Service will test the service for 2 years on online sales to Canada and Australia, negotiating prices and agreements with American companies that participate.

    What other ways could the Postal Service improve the international shipping experience for retailers and their customers? How else could the Postal Service tap into the global e-commerce market? Do any of its domestic services provide good templates or lend themselves to adoption for the international market?

  • 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 16th, 2012 in Delivery & Collection | 3 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.

Pages

This site provides a forum to discuss different aspects of the United States Postal Service and how it can be improved. We encourage you to share your comments, ideas, and concerns.

This is a moderated site—we will review all comments before posting them. We expect that participants will treat each other with respect. We will not post comments that contain vulgar language, personal attacks of any kind, or offensive terms that target specific individuals or groups. We will not post comments that are clearly off-topic or that promote services or products. Comments that make unsupported accusations will also not be posted.

We ask that reporters send questions to the USPS OIG Media Office through their normal channels and refrain from submitting questions here as comments. We will not post questions from reporters.

We recognize that the Web is a 24/7 medium, and your comments are welcome at any time. Given the need to manage Federal resources effectively, however, we will review comments and post them from 9:00 a.m—5:00 p.m Eastern Time, Monday through Friday. We will read and post comments submitted after hours, on weekends, or on holidays as early as possible the next business day.

To protect your own privacy, and the privacy of others, please do not include personal information or personally identifiable information such as names, addresses, phone numbers or e-mail addresses in the body of your comment.

Except when specifically noted, any views or opinions expressed on this forum (or any other forums available via an RSS feed) are those of the individual bloggers. The views and posted comments do not necessarily reflect those of the U.S. Postal Service Office of Inspector General, or the Federal government.

Thank you for taking the time to read this comment policy and disclaimer. We plan to blog weekly on as many emerging new media topics as possible. We encourage your participation in our discussion and look forward to an active exchange of ideas.