• on Nov 2nd, 2010 in Ideas Worth Exploring | 7 comments
    In a world where speed is everything, a new product is becoming popular that takes it s-l-o-w. It’s called Future Mail. In China, several companies are offering to deliver mail as slowly as you want, — even weeks, months, or years into the future. No time machine necessary! Some customers are using Future Mail to send letters to their future selves, others use it to be sure their anniversary, birthday, or holiday greetings will arrive exactly on time. Future Mail customers simply fill out, address their cards, letters, or packages, and specify the date they want them delivered. These new companies will make it happen. One can even purchase gifts and flowers to be sent in the future. When signing up for the service, customers are assessed a fee depending on how long the company has to hold on to the deliverables. Customers must also provide current contact information, in case their item is undeliverable in the future. Once the letter or package is handed over, the company tucks it away in a safe place until the date selected comes around. Though some customers have concerns about what happens to their packages if the companies fail, the service continues to catch on. This unique service may prove to be a new revenue stream for the U.S. Postal Service. Do you think there will be a market for Future Mail here? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Sep 29th, 2010 in Strategy & Public Policy | 7 comments
    The U.S. Postal Service is used to delivering large amounts of mail. Last year, it delivered more than 177 billion pieces. More mail pieces are sent per person in the United States than almost anywhere else in the world. But mail volume has been declining. How will the Postal Service change if volumes continue to fall? Is the Postal Service even financially sustainable at lower volume levels? The Office of Inspector General (OIG) asked the George Mason University School of Public Policy (GMU) to find out. The results of GMU’s work appear in a paper released today on our website. GMU researchers looked at how mail volumes of 150, 125, 100, and 75 billion would affect the Postal Service’s financial position and cost structure. Their results are encouraging. They found that the Postal Service is financially sustainable at volume levels down to 100 billion pieces per year, although price increases above inflation would be needed. The cost structure of the Postal Service would also change at lower volume levels. For example, delivery would account for a much larger share of total costs. GMU researchers also looked at the effect of various cost reduction initiatives and how they would impact the price increases necessary to break even. The paper describes their results and a description of the model they used for their analysis. What do you think? What are the biggest challenges for the Postal Service at lower volume levels? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Sep 20th, 2010 in Delivery & Collection | 58 comments
    Although eliminating Saturday delivery has been heavily debated, reducing delivery to 5 days a week may not be enough. There has been some discussion of whether the viable model for the U.S. Postal Service of the future will incorporate 3-day delivery. A 2010 study by the Boston Consulting Group for the Postal Service forecasts that the average pieces of mail per delivery point per delivery day will drop from 3.8 to 2.8 by 2020. If this projection holds true, then more households will likely receive no mail on any given day. With the increasing availability of alternative communication choices, it is unlikely that the demand for mail delivery will ever return to previous levels. Therefore, postal delivery may only be needed 3 days a week. Some homes could receive mail on Monday, Wednesday, and Friday, while others, on Tuesday, Thursday, and Saturday. Delivery would still occur 6 days a week for Post Office boxes. This additional benefit for P.O. Boxes would meet the needs of customers who have need of 6-day delivery, while generating higher revenue and increasing traffic for the Post Office. For many customers in the future, the amount of mail they will receive on a given day may not warrant the effort required to check their mailboxes every day. Delivering 3 days per week roughly doubles the amount of mail a household receives on a given day, making the “mail moment” of receiving mail more significant. The savings could be significant. With the Postal Service estimating a $3.5 billion saving from cutting one day of delivery, cutting three days could save roughly $10 billion. An additional benefit of this every-other-day schedule is that about 50 percent of the mail will have an additional day to reach its destination. These savings can be realized through the use of less costly modes of transportation, additional use of hub-and-spoke mail consolidation network design, and additional load balancing for the mail processing equipment. What do you think? Can this model balance the need to be financially viable while meeting the needs of the public? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

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