• on Oct 18th, 2013 in Strategy & Public Policy | 1 comment

    Last month, the U.S. Postal Service awarded the contract for a pilot program for a cloud-based identity management system called the Federal Cloud Credential Exchange (FCCX). Using a closed communications network, or "digital pipelines", the Postal Service will deliver digital packets ("envelopes") of secure identity data between government agencies and private or public identity providers. The idea is that a person could use an identity from one of many providers, such as a financial institution or utility, to access different government websites, as long as the identity met a required level of security. This should be far more convenient than logging in to separate services with multiple identities and passwords.

    Government and identity provider participants in FCCX have not been finalized. But the Veterans Administration is on board, and other potential participants, such as the Internal Revenue Service, Department of Education, and Social Security Administration, have been working with the Postal Service on the requirements and standards for the pilot.

    Once the digital pipelines have been established, they can be applied to a number of processes that require secure communications. For example, the Internet of Things, the networked interconnection of everyday objects, may include high-risk communications, such as between medical monitors and medication dispensers, mobile payment sites and financial institutions, or electric meters and power companies. The Postal Service recognizes the potential value of playing an enabling role and has made a move to secure a position in the digital world. Nextgov.com reports that the Postal Service has recently filed for a number of digitally oriented trademarks to cover services in data encryption, secure communications, and electronic document management.

    What do you think? Can the Postal Service bring greater security and privacy to online communications and transactions?

  • on Sep 30th, 2013 in Products & Services | 6 comments

    This is the time of year when retailers, nonprofit organizations, and other mailers step up their holiday advertising mailing campaigns. Volume spikes in this period, known as the fall mailing season, which then gives way to the even-busier holiday mailing season, when personal correspondence and packages spike. The U.S. Postal Service makes most of its money for the year in the period between Labor Day and Christmas.

    Commercial mailers work closely with the Postal Service to help it prepare, but the fall mailing season has always presented operational challenges. In some ways, it is highly efficient because facilities are staffed for busy times. But postal equipment, including mail tubs, trays, mail transporting equipment, and pallets, have to be in the right places at the right times. In past years, commercial mailers have complained about shortages of mail equipment. Ideally, mail sorting equipment should run at optimal throughputs for maximum efficiency, and the online system mailers use to set up mail entry appointments should work seamlessly. Still, mail delays can occur for a variety of reasons, including mail processing errors, inefficient use of automation equipment, congestion on the facility floor, and working from incomplete operating plans.

    The Postal Service’s fall mailing season plan attempts to eliminate roadblocks to swift processing and delivery. This year, it has ordered extra mail transport equipment and looked at ways to shift volume from heavily used equipment to under-used processing equipment. The Postal Service is also relying on the increased visibility from the Intelligent Mail barcode as a diagnostic tool to uncover bottlenecks. These tools helped it reduce mail delays in fall 2012 by showing “pinch points” and helping managers act on that information to reduce mail cycle times.

    This year, however, could prove especially challenging as the Postal Service continues with its network consolidation implementation. It has completed more than 150 facility consolidations and has moved more than 700 pieces of equipment in support of the consolidations. With the late date of Thanksgiving this year, the end of fall mailing season pushes right into the peak mailing season for the holidays.

    Mailers, what have your experiences been like so far this fall mailing season? Are there noticeable improvements in mail equipment availability, mail delivery times, and appointment opportunities? Has network consolidation posed any unexpected challenges?

  • on Sep 26th, 2013 in Pricing & Rates | 9 comments

    The U.S. Postal Service’s governing body, the Board of Governors, voted this week to request permission to raise postage prices above the inflation-based price cap to generate $2 billion in revenue in 2014. It is asking the regulator, the Postal Regulatory Commission (PRC), to allow the Postal Service to raise the price of a stamp by 3 cents (to 49 cents), which is 2 cents more than the annual inflationary increase. Prices on other single-piece and commercial mail products would also increase. This request is known as an “exigent” price increase because it will exceed the statutorily mandated price cap that is tied to growth in the Consumer Price Index (CPI).

    By law, the Postal Service can only raise prices on its market-dominant products, such as First-Class Mail, advertising mail, and magazines, by the annual growth in inflation. The law allows it to ask the regulator for a price increase above inflation for “exceptional or extraordinary” circumstances. In a public letter to customers, Board Chairman Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above inflation. Barnett said if comprehensive postal reform legislation were to pass, the Postal Service would reconsider its pricing strategy.

    The Postal Service filed for an exigent price increase in July 2010, saying the economic recession was an exceptional circumstance that threatened its viability. The PRC rejected the proposal and the Postal Service challenged the rejection in federal appeals court. The court remanded the original case back to the PRC, but at that time, the Postal Service did not pursue it.

    If the PRC were to approve this current request, the Postal Service would raise prices on January 14, 2014. On average, postage rates would increase 5.9 percent – or 4.3 percent above CPI. Mailer groups are expected to oppose the exigent price increase. The PRC has 90 days to issue an opinion on the Postal Service’s exigent price increase proposal.

    What do you think? Share your thoughts on the proposed exigent price increase.

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