on Dec 12th, 2011
in Products & Services
| 6 comments
Every year, millions of Americans send holiday greeting cards through the mail to friends and family around the country. Usually this means a trip to the store to pick out cards, the Post Office to get stamps, sometimes even a photographer to capture that perfect holiday photo, and another trip to the Post Office to mail the cards. But now there are many options for creating a holiday greeting card that save both time and money. Not only are these options a potential boon to consumers, they are an opportunity for the Postal Service. Several years ago, Hallmark® introduced a hybrid greeting card that customers can order online. For one price, customers create a card by choosing a design and uploading their own photos and even choosing the day the Postal Service delivers the card. This year, Apple® introduced Cards, a smartphone application that allows customers to create and mail hybrid greeting cards directly from their iPhones. Still, for those who love the experience of shopping for cards, a number of Postal Service retail locations offer a selection of greeting cards allowing customers to buy, stamp, and send them from the same location. Offering holiday cards through multiple platforms has a number of benefits for the Postal Service and its customers. This type of multi-channel strategy provides customers with convenience and multiple options for using physical mail. If expanded to other postal products, such as Priority Mail or Standard Mail, this strategy could provide the Postal Service with an opportunity to grow mail volume for other mail classes and improve customer satisfaction by making other products and services easier and more convenient to use. Additionally, hybrid holiday cards, whether created from online or mobile platforms, represent a path forward for the Postal Service in the digital world. It shows that digital technology can compliment and not be the enemy of physical mail. So, should the Postal Service make efforts to apply this multi-channel, hybrid mail model to other postal products, and if so which ones? Do you plan to send your holiday cards this year using an online or mobile card builder or are you sending them the old fashioned way? Let us know your thoughts in the comment section below. This blog is hosted by the OIG’s Risk Analysis Research Center.
on Oct 31st, 2011
in Pricing & Rates
| 12 comments
When mailing a letter that weighs about one ounce, the U.S. Postal Service’s 44 cents is one of lowest First Class postage rates. Whether you are mailing a letter locally or sending a greeting card across country, it still only costs 44 cents now, but will increase to 45 cents in January. The graph below compares the U.S. Postal Service’s postage rate with other countries. As you can see, Norway charges the highest rate, which is nearly four times the cost U.S. rate.
on Sep 5th, 2011
in Mail Processing & Transportation
| 5 comments
The U.S. Postal Service has aggressively moved to reduce costs by consolidating its processing network and realigning its delivery facilities. However, it has essentially eliminated rail transportation, which is the least costly way to move mail long distances. During the recent economic downturn, railroads invested heavily in infrastructure to improve service. Private industry shippers of time-sensitive materials have responded to these improvements by shifting volume from highway to rail. UPS (the largest rail customer in the U.S.) attempts to put any package traveling over 750 miles on rail. JB Hunt, one of the Postal Service’s largest highway contractors, has shifted a substantial freight volume to rail and now earns more than one-third of its overall revenue from intermodal rail transportation. The potential benefits to the Postal Service are clear. Rail is a less expensive and more environmentally friendly transportation mode compared to trucking. Recent estimates show that intermodal rail service can improve fuel efficiency by about 3.5 times relative to highway tractor-trailer service. In addition, rail gives the Postal Service more capacity flexibility as this mode can operate one-way, while highway transportation must be purchased in round-trips. Since Postal Service volumes tend to flow from north to south and east to west, utilizing rail would avoid the cost of paying for empty or near-empty trucks on the return trips. Rail is also far less susceptible to the weather interruptions that can wreak havoc on highways. The shift to rail, however, is not without its drawbacks. On average, rail is slower than highway transportation. It would also require greater monitoring and pre-planning and complex decision-making by management. For example, the Postal Service would need to choose when to dispatch to rail yards versus alternatives such as dispatching a highway trailer to a network distribution center or other consolidation points. Although it would require some additional efforts, the potential savings to the Postal Service of converting from highway to rail could be tremendous. While concerns related to speed of service moved the Postal Service almost completely away from rail, other shipping companies are embracing rail with vigor. This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
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