• on Feb 22nd, 2014 in Products & Services | 3 comments

    Postal customers took fewer trips to the Post Office this past holiday season but that doesn’t mean they spent less on postal products. They just conducted more business through alternative channels, such as online at USPS.com and self-service kiosks. Over the 2013 holiday season, transactions at brick-and-mortar post offices were down 8 percent compared to last year, but transactions through alternative access were up 17 percent, postal officials reported.

    The movement to online postage transactions certainly mirrors the larger societal shift toward e-commerce and mobile commerce. But the big shift over the holidays to alternative access could also be the result of reduced hours at some post offices. Customers will shop where they find it most convenient, and in some locations post offices are opened only a few hours a day. This certainly makes Village Post Offices and contract postal units, self-service kiosks, and online purchasing more attractive. Many of these options are available 24 hours a day.

    The U.S. Postal Service recognizes that it needs to be where people find it most convenient to buy postage or other mailing services. The Postmaster General stated as much at the recent Mailers’ Technical Advisory Committee meeting when addressing alternative access, including the Postal Service’s decision to partner with Staples. But alternative access retail options have limitations, which if not addressed could frustrate customers and leave some money on the table.

    Our recent audit of self-service kiosks found that customers are not using kiosks as much as anticipated for a few reasons: they sometimes are located in hidden parts of the lobby; kiosk signage is not always visible; and lobby assistants are not always available or fully trained to help customers help themselves. In addition, self-service kiosks are generally housed in retail outlets with the highest mail volume, primarily urban and suburban areas. Low-traffic retail outlets, often in rural areas, get a double whammy. They are not likely to have a kiosk and their Post Office hours are reduced.

    How can the Postal Service ensure that customers receive suitable services while reining in operating costs? Does the Postal Service need more self-service kiosks, or should it redistribute the 2,500 now in service? What incentives might the Postal Service offer merchants to house Village Post Offices? Or should the Postal Service restore hours to its own post offices, even those that are not profitable? 

  • on Dec 30th, 2013 in Delivery & Collection | 19 comments

    The 2013 holiday season turned out to be a particularly eventful one for e-tailers and the shippers that deliver all those packages to your door.

    Factors like fewer than average shopping days between Thanksgiving and Christmas and an increasing comfort level with online buying helped push holiday e-commerce up significantly. In fact, demand exceeded expectations and stressed shippers’ capacity, causing some late deliveries of their goods.  

    Package delivery is clearly a growth industry and the Postal Service expects its piece of that business to rise 6 to 7 percent annually through fiscal year 2017. But is the Postal Service ready for all these packages? Can it meet the growing demand, or is it hampered by a delivery infrastructure that is largely geared toward letters and flats? We recently took a look at the issue and the results were mixed.

    Our audit report, Readiness for Package Growth – Delivery Operations, found the Postal Service has done a good job of managing package growth in terms of mail volume and workhours. But it could make some changes to better handle future increases. For example, to-the-door delivery works well but curbside mailboxes were primarily designed for letters, flats, and small parcels, and they can’t easily accommodate multiple or large packages. We suggested the Postal Service look at modifying cluster boxes to accommodate more packages.

    We also encouraged the Postal Service to explore investing in shelving space on delivery vehicles to accommodate packages and to continue to develop an advanced dynamic routing system. Dynamic routing analyzes individual addresses to tell the carrier how to get to them more quickly. The tool takes into consideration things like traffic congestion and left-hand turns, both of which can eat up time and fuel. These and other steps outlined in the report should help the Postal Service expand services and increase revenue to meet growing customer demand.

    So, what was your experience over the holidays? Were you among the many Americans who bought more gifts online than in previous years? Were your delivery services reliable or did any part of the experience discourage you from future online buying? What changes would you like to see in delivery and returns?

  • on Sep 16th, 2013 in Delivery & Collection | 7 comments

    As online shopping has become the norm for many Americans, it has brought operational changes to both brick-and-mortar retailers and online retailers. Shipping costs are now a major consideration for companies. Retailers are working to control their shipping costs as their ebusiness grows, with the traditional retailers relying on their extensive network of stores to reduce shipping costs. Instead of shipping goods from centralized warehouses to far-flung customers, major retailers, such as Wal-Mart, Best Buy, and Gap Inc., deliver from stores close to their customers whenever possible.

    Amazon.com is focused on building more local warehouses and is also investing in its own delivery fleet. Other retailers have made merchandise available to eBay to sell in select cities with its same-day delivery service, eBay Now. Shipping merchandise from locations close to where customers reside allows retailers to save on shipping costs, which are set based on the distances shipments travel.

    Customers are expecting ever higher levels of service. Same-day delivery to a growing number of customers helps retailers provide customers something close to the immediate gratification of an in-store purchase. So far, however, this service has been limited to customers in cities where a decentralized network can serve them.

    While lower shipping costs is good for the retailer and its customers, the shipping giants are likely to feel the pinch. One retailer’s reduction in shipping costs is a courier company’s reduction in revenue. Ultimately though, these e-commerce shipping strategies should improve the online shopping experience and accelerate its growth, which will boost the number of packages sent. That’s a boon for all package delivery companies, including the Postal Service.

    With its reliable delivery network that serves every address in the United States, the Postal Service should be well-positioned for this shift toward fast, local delivery of online purchases. However, some challenges in its network processing capabilities and delivery operations could hinder its ability to capture a larger segment of the package delivery market. What ways could the Postal Service capitalize on these trends? What improvements does it need to make to position itself as the leader in shipping services?

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