• on Sep 24th, 2012 in Delivery & Collection | 3 comments
    The U.S. Postal Service recently reported that its third quarter delivery service performance results marked “all-time record service performance” across all mail categories. In particular, the Postal Service had significant improvement in delivery performance for its commercial mail products in First Class and Standard Mail. Periodicals’ on-time performance topped 80 percent for the first time since 2010, a major improvement over the 46 percent score from earlier this year. The improved service performance in the third quarter occurred while the Postal Service was in the process of consolidating 46 facilities, which some mailers feared would affect service. But initial reports suggest service has not been overtly disrupted by the consolidations, although the real test could come during the fall and holiday mailing seasons. The Postal Service recently completed this first phase of its network rationalization plan, and is now on a break from consolidation until 2013 after the election season. Postal officials have attributed the improvement in service performance to diagnostic tools that show “pinch points” and help managers to act on that information to reduce cycle times. The Intelligent Mail Barcode full-service data, which identifies many potential problems, is also helping and employees are doing outstanding work often under difficult circumstances. It will be important for the Postal Service to maintain strong service performance as volumes pick up during the fall mailing season and election mail is added to the mix. Further, the second phase of consolidations could begin in February 2013 and could have an impact on service. Finally, mailers report that they are not solely concerned with service scores but that the Postal Service delivers the mail as promised. What has been your experience with service over the past few months? Have you been affected by the consolidations? Are you concerned about phase two of the network consolidation plan?
  • on Dec 6th, 2010 in Finances: Cost & Revenue | 8 comments
    Mailings that meet minimum volume and preparation requirements to qualify for reduced postage rates are called business mail. Properly accepting business mailings is critical for the Postal Service since it accounted for $25 billion in revenue in 2010. Several types of Postal Service facilities accept business mail. Business Mail Entry Units have acceptance clerks with specialized training and systems for accepting business mail. Local Post Offices can also accept business mail. Most revenue for bulk business mailings is recorded using a system called PostalOne!. PostalOne! has built-in controls that assist clerks in properly accepting the mail. However, approximately 11,000 units that recorded more than $114 million in Permit Imprint and Periodicals transactions in FY 2010 have been forced to operate without PostalOne!. Regardless of the level of training or type of system used, each unit must accept, verify, and collect postage for mail according to required policies and procedures, a process for which it is crucial to have PostalOne!. If classified and accepted improperly the Postal Service risks accepting improperly prepared mail or mail paid at an improper rate. For the past several years, the Postal Service has faced significant revenue losses due in part to decreased mail volume and increased competition from other media alternatives. The Postal Service must continue to explore opportunities to improve processes and eliminate redundancies in their system. Because business mail acceptance generates a significant amount of revenue, the Postal Service may want to reevaluate the number of entry points for accepting business mailings, including the 11,000 units not on PostalOne!. Do you think that the Postal Service should restructure the entry points for business mail? Give us your comment below. The topic is hosted by the Office of Audit Field Financial – East team.
  • on Mar 29th, 2010 in Mail Processing & Transportation | 15 comments

    By Jim O’Brien

     

    Back in 1990, Halstein Stralberg coined the term “automation refugees” to describe Postal Service mail processing employees who were assigned to manual operations when automation eliminated the work they had been doing. Since the Postal Service couldn’t lay off these employees, they had to be given something to do, and manual processing seemed to have an inexhaustible capacity to absorb employees by the simple expedient of reducing its productivity. The result was a sharp decline in mail processing productivity and a sharp increase in mail processing costs for Periodicals class. Periodicals class cost coverage has declined steadily since that time. Along with other efforts to get to the bottom of this issue, the Postal Service and Periodicals mailers formed a Joint Mail Processing Task Force in 1998. Halstein Stralberg and I were participants in this effort. We were puzzled by the fact that the flat sorting machines always seemed to be down during our seventeen Postal facility visits, in spite of the fact that they were supposed to run seventeen hours per day and that we visited facilities at all hours of the day and night. We were able to see the “bullpens” where mail processing employees manually tossed bundles of periodicals into rolling containers. Although the machines were down, the bullpens and other manual operations were always up and running. Fast forward to 2010. More Periodicals mail is manually processed than ever, and manual productivity continues to decline. Periodicals Class now only covers 75% of its costs. How can this dismal pattern of declining productivity and rising costs continue more than two decades after it was first identified, especially when the Postal Service has invested millions of dollars in flats automation equipment? How can the Postal Service continue to imply that Periodicals mailers are responsible for the cost coverage problem when mailers have substantially and consistently increased Periodicals worksharing? Yes, the recession did result in fewer advertising pages and lower revenue from Periodicals class mail, but the twenty-year-old elephant in the room continues to be the unanswered question of automation refugees and their impact on cost coverage. This issue would make an excellent subject for the OIG to investigate. The Postal Service should NOT be permitted to continue using Periodicals class mail processing as a dumping ground for its excess labor and the associated costs. What can be done to address the “automation refugees” issue? If Periodicals class mail is carrying a disproportional share of automation refugees, are there other areas where these employees can be used more effectively? Mr. O’Brien is the Vice President, Distribution & Postal Affairs for Time Incorporated. He is the Chairman of the Mailers Council, former Chairman of the Association for Postal Commerce (Postcom), former Chairman of the Magazine Publishers of America (MPA) Postal Committee, and a member of the MPA Government Affairs and Postal Committees. Mr. O’Brien has been involved with the printing, publishing, and distribution of magazines for more than 35 years. Prior to joining Time Incorporated in 1978, he held positions with R.R. Donnelley & Sons Company, United Parcel Service, and U.S. News & World Report. He is also the former CEO of Publishers Express, an alternative delivery that competed with the Postal Service in the delivery of magazines and catalogs. DISCLAIMER: The views expressed in this post are solely those of Mr. O’Brien and do not necessarily represent the views of the United States Postal Service or the Office of Inspector General. The U.S. Postal Service Office of Inspector General cannot guarantee the source, originality, accuracy, completeness, or reliability of any statement, data, finding, or opinion presented by this guest blogger.

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