on Sep 5th, 2011
in Mail Processing & Transportation
| 5 comments
The U.S. Postal Service has aggressively moved to reduce costs by consolidating its processing network and realigning its delivery facilities. However, it has essentially eliminated rail transportation, which is the least costly way to move mail long distances. During the recent economic downturn, railroads invested heavily in infrastructure to improve service. Private industry shippers of time-sensitive materials have responded to these improvements by shifting volume from highway to rail. UPS (the largest rail customer in the U.S.) attempts to put any package traveling over 750 miles on rail. JB Hunt, one of the Postal Service’s largest highway contractors, has shifted a substantial freight volume to rail and now earns more than one-third of its overall revenue from intermodal rail transportation. The potential benefits to the Postal Service are clear. Rail is a less expensive and more environmentally friendly transportation mode compared to trucking. Recent estimates show that intermodal rail service can improve fuel efficiency by about 3.5 times relative to highway tractor-trailer service. In addition, rail gives the Postal Service more capacity flexibility as this mode can operate one-way, while highway transportation must be purchased in round-trips. Since Postal Service volumes tend to flow from north to south and east to west, utilizing rail would avoid the cost of paying for empty or near-empty trucks on the return trips. Rail is also far less susceptible to the weather interruptions that can wreak havoc on highways. The shift to rail, however, is not without its drawbacks. On average, rail is slower than highway transportation. It would also require greater monitoring and pre-planning and complex decision-making by management. For example, the Postal Service would need to choose when to dispatch to rail yards versus alternatives such as dispatching a highway trailer to a network distribution center or other consolidation points. Although it would require some additional efforts, the potential savings to the Postal Service of converting from highway to rail could be tremendous. While concerns related to speed of service moved the Postal Service almost completely away from rail, other shipping companies are embracing rail with vigor. This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
on Aug 15th, 2011
in Products & Services
| 18 comments
In today’s world we have the opportunity to do just about anything with just the click of a mouse and a few key strokes. Recent studies show online retail sales continuing to grow despite the economic slowdown and decline of overall retail sales. A previous blog, Could Radio Frequency Identification Make the U.S. Postal Service the Premier Delivery System, stated, “Last year Americans spent $155.2 billion shopping online. This year Americans are projected to spend more than $190 billion.” Purchases made online have to be shipped and this provides a great opportunity for the Postal Service to increase parcel delivery service. The Postal Service delivers almost half the world’s mail and more than 171 billion pieces annually, of this amount, roughly 3 billion are packages (Source: 2010 Report on Form 10-K, United States Postal Service). In addition, the Postal Service is often the last mile option for delivering FedEx, UPS and DHL packages. In 2007, if given a choice, 46 percent of consumers would select the Postal Service to deliver their packages.(Source:Package Delivery Study conducted by comScore, March 2007.) The Postal Service has received several ideas for improving its parcel delivery service. Many suggest the Postal Service could be more competitive if it offered an improved track and trace and confirmation system. Other suggestions include reliable on-time delivery, increased speed of service, and a better loss and damage policy. This blog is hosted by the OIG’s Sales and Service Team.
on Apr 19th, 2011
in Ideas Worth Exploring
| 14 comments
Although the digital option has grown as a channel for Americans to communicate, purchase, and store personal information, there are drawbacks that leave a significant portion of the population underserved. To meet the population’s needs and “bind the nation together” in a digital world, the Postal Service must modernize its role. The U.S. Postal Service Office of Inspector General Risk Analysis Research Center has completed Part 2 of a series on the Postal Service’s role in the digital age. Building on the first white paper which explored the facts and trends impacting communications, The Postal Service Role in the Digital Age – Part 2: Expanding the Postal Platform, presents a strategic positioning framed by three guiding principles: •Promoting solutions for the communications problems of the digital age •Using the core competencies and assets of the Postal Service •Considering the policy implications of the strategy based on the current legal and regulatory environment Using an “eMailbox” that links a physical address to an electronic mailbox for every citizen and business, the Postal Service could build a digital platform that supports communications and commerce for postal, governmental, and commercial applications. The paper provides six additional initial applications for consideration, including: •An eGovernment application that promotes the expansion of government services throughout the postal platform and uses the eMailbox to send and receive secure and official communication with federal agencies. •Tools for identity validation, privacy protection, and transaction security that allow users to verify the individuals and businesses they are communicating with, the safety of their personal information, and security of their purchases and financial transactions. •Hybrid and reverse hybrid mail that allow senders and receivers to convert digital documents to physical and physical documents to digital. •Enhancing services for the shipping and delivery of secure online purchases through flexible pick-up and delivery options, expanded payment choices, and a cost calculation that includes all charges and fees for purchases (even international) at the time of sale. •Digital concierge services that use the eMailbox to integrate an individual’s physical and digital communications in a single place. These services act as a type of secure “lock box” and help manage the “information overflow,” providing quick access to important communications and other personal documents (such as medical records and wills). •Develop a network to buy and redeem cash and digital currency at Post Office™ locations and online. To learn more about the strategy and specific areas the Postal Service should consider, click here to read the paper. Do you think the Postal Service has a role in the digital age? Would you use any of these applications? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
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