• on Feb 13th, 2012 in Strategy & Public Policy | 12 comments

    According to the Postal Service, greater use of electronic communication continues to drive customers away from using First-Class Mail®. Instead of buying stamps, many customers pay bills online, send ‘e-invitations’ to friends and family, and simply press “Send” when they want to communicate. These shifting customer habits will continue to speed the migration away from traditional First-Class Mail. According to the Postal Service, First-Class Mail has dropped 25 percent and single-piece First-Class Mail – letters bearing postal stamps – has declined 36 percent in the past 5 years.

    Postal Service customers and others have complained that the planned consolidations and the elimination of overnight service standards will adversely affect them. On the other hand, the Postal Service claims that these consolidations are financially necessary and create a delivery network that more accurately reflects the current volume of mail.

    1. What are your thoughts on the consolidations? 2. How will the elimination of overnight service standards affect you? This topic is hosted by the OIG’s Planning, Innovation and Optimization Directorate. NOTE: An audit report, U.S. Postal Service Presents Network Optimization Initiative, shall be issued in tandem with this blog.
  • on Feb 6th, 2012 in Delivery & Collection | 17 comments
    In an effort to reduce costs, the U.S. Postal Service has proposed cutting delivery service to five days per week by eliminating Saturday delivery. For a moment, let’s ignore the argument over whether the delivery days should be cut to five to ask another question: is Saturday the right day to cut? While the Postal Service says Saturday has the lowest daily mail volume, it is the one day when most people are home to accept their mail. Some mail recipients say that Saturday is the delivery day they would least like to eliminate. Many periodicals and advertising mailers value Saturday above all other days because their customers have more time to read their magazines and ads and are more likely to act on them. Equally important, busy households are also available to accept packages—a competitive advantage the Postal Service has over the competition. Lastly, eliminating Saturday delivery could further crowd post offices with customers retrieving their packages. In its recent filing with the Postal Regulatory Commission proposing the end of Saturday delivery the Postal Service did not cite the impact on service of having two consecutive non-delivery days (such as Saturday and Sunday). Eliminating delivery on Saturdays or Mondays could slow service more than eliminating it on some other day. For example, let’s take a product like Priority Mail or First-Class Mail that we will assume takes exactly two days to be delivered after it is deposited. Since the Postal Service does not accept or deliver mail on Sunday, the current average delivery time would be 2.17 days. If you end delivery on Saturday, the average delivery time would increase to 2.50 days (pieces sent on Friday and Thursday would take 3 and 4 days respectively). Alternately, ending Tuesday service would keep the average delivery days at 2.17. So ignoring the argument over whether it makes sense to convert to 5-day delivery, would it be better to cut Saturday delivery rather than some other day? Are there better options? Would it be possible to end Saturday delivery for business addresses while eliminating Tuesday delivery for residential addresses instead? Tell us what you think.

    This blog is hosted by the OIG’s Risk Analysis Research Center.

  • on Jan 30th, 2012 in Strategy & Public Policy | 2 comments
    As America was expanding in the 1780s, the founding fathers realized that open access to secure and private communication among its dispersed citizens was critical to forming political groups and holding free elections without fear of retribution. The U.S. Constitution empowered Congress “to establish post offices and post roads,” the most common form of telecommunication (communication over a distance) in 1789. The founding fathers provided the necessary infrastructure to “bind” the growing nation together through communication and commerce. Thereby, the Post Office Department (now the U. S. Postal Service) was born.

    In the late 1800s, the U.S. Supreme Court, in a case involving conflicting interest between two electric telegraph companies, stated a broad interpretation of Congress’ constitutional postal powers:

    “…The powers thus granted are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth.” (PENSACOLA TEL. CO. V. WESTERN UNION TEL. CO., 96 U. S. 1 (1877))

    The Postal Service has modernized many times over, moving well beyond manually sorting letters and delivery mail via horse-riders. Today, however, people, government, and businesses are transitioning to using the Internet to communicate, because of lower cost and nearly instant delivery. Yet, the Internet lacks privacy and security in digital communications and transactions. In addition, Internet access is too expensive or merely unavailable for many elderly or poor citizens. While free markets excel at many things, enforcing privacy and security or providing access to disadvantaged groups have not been among the core responsibilities of the market. In America, these have historically been the duties of its representative government.

    America’s requirements for a secure national communications system have evolved since the Constitution was drafted, but the fundamental need for such a system seems to remain. Does America need secure universal digital postal services as much today as it needed traditional mail in the past? What do you think?

    This blog is hosted by the OIG’s Risk Analysis Research Center.

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