• on Dec 3rd, 2012 in Delivery & Collection | 6 comments
    The U.S. Postal Service is about the best in the world at providing its core service of mail delivery. In fact, its ability to deliver mail and return undeliverable mail to the sender effectively makes the United States government one of the most efficient in the world, according to a working paper by National Bureau of Economic Research. A group of economists rated the efficiency of the world's governments with a simple test of their postal systems. The group mailed fake letters to nonexistent businesses in 159 countries and waited a year to see which were sent back to a professor at Dartmouth College in New Hampshire. The goal was to use a simple, universal service to explore why, other than corruption, developing countries tend to have poorly performing governments. All the letters went to countries that subscribe to the Universal Postal Union, which requires that incorrectly addressed mail be returned within a month. The United States was one of only four countries to send the undeliverable letters back within 90 days, along with El Salvador, Czech Republic, and Luxembourg. In fact, the U.S. had the fastest return rate at 16 days, although it may have benefited from returning the letters to an address in the United States. It also returned 100 percent of the fake-addressed letters. The study was not intended to assess the Postal Service, but the results do highlight some of its key strengths, at least compared to foreign posts. Foremost, better classification systems for addresses tended to result in faster returns, the economists noted. The Postal Service uses uniform address standards and its address database is among the most robust in the world. Again, this was not the study’s intention, but the results seem to support the Universal Postal Union’s (UPU) position that a national addressing system is essential to the economic and social advancement of countries. In its recent white paper, “Addressing the World – An Address for Everyone,” the UPU says that in many developing countries, physical addresses exist only in city centers. Without physical addresses, it is difficult to impossible for public services and businesses to reach their intended targets. “A quality address infrastructure must be considered as an essential part of a country’s socio-economic infrastructure, not only for improving public services, but also facilitating business, trade and, consequently, national development,” the UPU says. How important is an addressing infrastructure to government efficiency and business development? What parts of addressing does the Postal Service do particularly well? What could be improved? Share your thoughts.
  • on Aug 13th, 2012 in Products & Services | 29 comments
    More than 40 million Americans change their address each year, which means the U.S. Postal Service forwards an awful lot of mail. In fiscal year 2010, it forwarded 1.2 billion pieces. Under the Postal Service’s regulations, customers who fill out a change of address form have their mail forwarded to their new address for 12 months after the move. Mail forwarding costs the Postal Service almost $300 million a year. The cost to return mail to sender is another $800 million. The cost of mail forwarding – and returning to sender and treating as waste -- is baked into the overall First Class Mail rates, so all customers effectively pay for this service whether they use it or not. Canada Post has taken a different approach to mail forwarding, charging recipients either an annual or semi-annual fee when they move. Residential customers pay $75 for 12 months of forwarding and business customers pay $235. These prices increase slightly if the person or business moves to another province. The Canada Post model extricates the costs from the overall First Class Mail rate and is structured so recipients pay for the service, but only if they use it. Some U.S. business customers have requested that the Postal Service explore new pricing and product options to reduce the costs of forwarding and returning mail to sender. Would a model similar to the Canada Post one work in the U.S. or would residential recipients, in particular, feel like they were being charged for a service they thought was free? Should the sender pay for forwarding instead of the recipients? What would happen if recipients or senders decided against paying for forwarding? Would total costs merely go up since return to sender mail costs more than twice as much as forwarding per piece? Are there other alternatives? Share your thoughts below.