• on Mar 3rd, 2014 in Ideas Worth Exploring | 3 comments

    Canada Post shares a number of similarities with the U.S. Postal Service, including its founding by Benjamin Franklin in 1753 when both Canada and the 13 colonies were under British rule. Both posts are self-supporting, meaning they pay for their operations through the sale of postage and services. And Canada Post, like the Postal Service, has suffered volume losses the past few years.

    Here’s where things get different, though. Canada Post has adopted a radical plan to restore its financial health, featuring bold initiatives that might seem too politically difficult in the United States. Canada Post’s five-point plan is intended to streamline operations, cut costs, and return the corporation to fiscal self-sufficiency by 2019.

    The plan features:

    1. Ending to-the-door residential delivery over 5 years. Two-thirds of Canadian residents already are without to-the-door delivery, so, while it is a major change, perhaps it is not as disruptive as it would be in other countries.
    2. Upping the price of postage. Bought in bulk, stamps that now cost 63 cents (CAD) will be 83 cents. Bought singly, the same stamps will cost $1. The increase still needs approval from the regulator.
    3. Streamlining via franchise post offices. Franchise post offices are more convenient for customers and less costly to operate. There’s a moratorium, however, on closing existing rural post offices given their popularity among customers.
    4. Increasing efficiency. Consolidation and technology improvements, including faster sorting equipment and more fuel-efficient vehicles, should improve operations. No resulting changes are expected in the corporation’s fairly relaxed 2- to 4-day delivery standard for letter service, yet parcel delivery is expected to improve.
    5. Reducing labor costs. Along with the service cuts, Canada Post said it would eliminate 8,000 jobs, mostly through attrition.

    Canada’s plan has met with criticism from opposition political leaders, labor unions, and some citizens. But Canada Post defends the plan saying without major operational changes it will lose $1 billion a year starting in 2020. It also faces a $6.5 billion pension fund shortfall.

    What could the United States learn from the Canada Post plan? Are some of these initiatives worth trying in the United States? Or are they not the right approach for the U.S.? What cost-cutting and revenue-generating ideas should the Postal Service focus on? 

  • 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 Feb 18th, 2014 in Strategy & Public Policy | 19 comments

    There’s no lack of opinions in Washington about what the U.S. Postal Service should do to get out of its precarious financial situation. Cut this, add that, restructure these, and so on. But what about the public? What do Americans want - expect - from the Postal Service?

    Our office commissioned focus groups across the nation, speaking with scores of people young and old, from rural areas and big cities. The goal was to gauge perceptions of the Postal Service to understand what Americans not only want from the Postal Service, but also need from it. The results are compiled and analyzed in our new white paper, What America Wants and Needs from the Postal Service.

    One key finding was that (a), many participants mistakenly believed that the Postal Service receives taxpayer funding, and (b), when they learned the Postal Service is in fact self-funded, much like any other business, nearly everyone’s views and expectations began to soften, allowing for greater flexibility and compromise on service.

    Overall, we found that Americans were most willing to accept a reduction in a particular service they are currently pleased with. For instance, most rural participants were open to – even excited by – the possibility of shifting to cluster box delivery because it could provide more security in locations where mail theft and mail box vandalism are common. Reduced number of delivery days was also acceptable to almost all participants.

    Among other key findings, all but two of the total 101 participants said they would, in general, be affected to some degree if the Postal Service were to disappear. And rural participants viewed post offices as community centers, while urban participants saw them as a convenience.

    The big take-away: We found that what Americans need from the Postal Service is much less than what they want, and they are willing to make trade-offs to maintain a certain level of service. What America Wants and Needs from the Postal Service [link] details the trade-offs, highlighting some of the different preferences that emerge when urban and rural populations are compared. And yet, among the differences, a common theme is also evident – Americans still value the Postal Service.

    Tell us your thoughts:

    • What do you need and want from the Postal Service?
    • Did you know that the Postal Service is self-funded?
    • Does that knowledge affect your opinion or expectations regarding Postal Service services? 

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