• on Nov 23rd, 2009 in Strategy & Public Policy | 14 comments
    We all know the Postal Service is going through rough times right now. Sometimes, when a situation is difficult, it’s useful to look to the past for perspective. Forty years ago today, there was no Postal Service (and no Office of Inspector General). The Post Office Department was 5 months away from an unprecedented strike, and 15 percent of the Postal Service’s FY 1969 revenues came from appropriations. Mail volume was 82 billion pieces. There were 739,002 employees and 43,220 post offices (including stations and branches).

    Three years earlier, mail operations at the Chicago Post Office had broken down for three weeks leading to a backlog of 10 million pieces. Sixteen months earlier, the President’s Commission on Postal Operations, known as the Kappel Commission, had released its report (Click here for the first part of the report). The first line read “The United States Post Office faces a crisis.” The report described several problems:

    • Customers were dissatisfied with inconsistent mail service following a period of rapid volume growth. Moreover, the Post Office Department had little knowledge of what products its customers wanted.
    • Employees experienced antiquated personnel practices, poor working conditions in many facilities, and limited opportunities for training or advancement. More than 80 percent of employees started and ended their careers at the same grade level. Some opportunities required political connections. historical carrier
    • The system of supervision was inadequate with supervisors isolated from management decisions, and relations between labor and management were poor.
    • The Post Office operated at substantial deficits financed by the government, and there was a chronic shortage of funds for capital investment.
    • Productivity was low as “[in] most offices men and women lift[ed], haul[ed] and push[ed] mail sacks and boxes with little more mechanical assistance than the handcart available centuries ago.”
    • Pricing was based on inaccurate cost systems, and the rates were set by Congress.
    historical workers

    The Kappel Commission diagnosed all of these problems as manifestations of a single root trouble: Management had no authority to manage. Their proposed solution was a government corporation.

    The Postal Reorganization Act of 1970 (PRA) became law the August following the strike. The PRA did not include all the Kappel Commission’s recommendations, but they were highly influential. The Post Office emerged as a new, much more independent Postal Service.

     

    historical mailroom

    Are there any lessons for today in the problems of 40 years ago? Postal operations were losing more money in 1969, but volume was growing. Are prospects better or worse today? What will future commentators say about the Postal Service 40 years from now?

    This topic is hosted by the OIG's Risk Analysis Research Center (RARC)

  • on Nov 9th, 2009 in Delivery & Collection | 65 comments
    News about disappearing collection boxes is everywhere these days. Even BBC News ran a story on the decline of the blue collection box in the United States.

    The Postal Service argues that picking up mail from collection boxes is expensive. Removing underused boxes is a cost savings move and a reasonable response to the economic crisis. The Postal Service is removing boxes with less than 25 stamped mail pieces per day.

    Critics wonder if there is adequate analysis to support the 25-piece minimum and whether one reason for removing collection boxes — in addition to the minimal cost savings — is that the Postal Service does not want to be criticized for poor service. Fewer boxes mean fewer opportunities to miss a collection or to pick up mail too early.

    Is the Postal Service thinking too narrowly and missing some of the value of collection boxes? The ubiquitous presence of the boxes is free advertising for the ailing agency. How much would a private sector company pay to be allowed to put a collection box anywhere it wanted to in the country? Millions? Billions?

    What do you think? Is removing collection boxes a reasonable cost-cutting move or a strategic mistake that the Postal Service will later regret?

    This topic is hosted by the OIG's Risk Analysis Research Center (RARC).

  • 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.

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