• on Nov 13th, 2013 in Delivery & Collection | 6 comments

    This week the Postal Service announced plans to move into one of the few remaining frontiers of package delivery – Sundays.

    Under a new negotiated service agreement approved by the Postal Regulatory Commission, e-tailing giant Amazon.com will use the Postal Service’s Parcel Select service to ship everything from clothing to garden tools on Sundays. The program is running now in the New York and Los Angeles metropolitan areas, with a rollout planned in 2014 in Dallas, Houston, New Orleans, and Phoenix, to name a few.

    Sunday delivery isn’t exactly new. The Postal Service delivers 7 days a week using the premium Priority Mail Express product. So, what’s really new is the low cost of the service – making it a solid option for consumers.

    Utilizing the Postal Service’s ubiquitous delivery network Amazon.com is able to keep its costs down and, for example, give its Amazon Prime members who get unlimited, free two-day shipping the flexibility to get packages on Sundays.

    The Postal Service faces stiff competition as it seeks to grow its package business and take advantage of the explosion in e-commerce. But it has seen significant gains in its parcel sector through innovations such as flat rate Priority Mail packaging.

    With this latest move, the Postal Service is looking to strengthen its market position in business-to-consumer shipping and to further distinguish itself from its main competitors – FedEx and UPS.

    What do you think of the Amazon.com partnership? Do you foresee operational, staffing or other problems for the Postal Service as it ramps up for Sunday deliveries? Will this be a net financial win for the Postal Service and its customers? 

  • on Nov 11th, 2013 in Strategy & Public Policy | 10 comments

    Innovation is a hallmark of the digital revolution yet for many companies innovation remains hard. The popular book The Innovator’s Dilemma notes that companies often either ignore a disruptive technology or if they recognize it, they try to manage it like their traditional business. The book says companies need to recognize the disruptive technology and then set up a separate unit to manage it.

    The U.S. Postal Service finds itself struggling to innovate in a rapidly changing communications market. Yet, stakeholders agree that innovation is necessary to transform the Postal Service into a 21st century provider. The Postal Service has indicated a willingness to try new things, as allowed under the current law, but the time it takes new ideas to become a product or service is often too long in this fast-changing market. Some stakeholders have suggested the creation of a small, dedicated innovation unit that would have the authority to make partnership decisions and the flexibility to bring innovative products and services to market quickly. The major postal reform legislation now before Congress includes a provision that could essentially lay the groundwork for such a unit.

    The Postal Service actually tried small, cross-functional business units in the late 1990s. It had an international business unit that was given considerable autonomy and an Expedited Package Services (EPS) group located completely outside of headquarters in Atlanta. The EPS group was given freedom to pursue new partnerships and parcel services. Insiders might argue over how much of the credit EPS deserves, but in its short life, a number of package services were revamped or unveiled, including Parcel Select, Carrier Pickup of residential packages, and the groundbreaking contract with FedEx to provide airlift for Priority Mail. These separate units probably had some flops too, but innovation means taking risks and being allowed to fail occasionally.

    Do you think a small, agile, cross-functional “innovation unit,” led by a chief innovation officer, would help the Postal Service launch new products and services? Or does a dedicated innovation czar create a bottleneck that is inconsistent with the spirit of having innovative thinking permeate the entire organization? Would an “incubator” or “innovation lab” approach be better? What institutional changes might be needed to promote innovation? Does the current regulatory environment allow the Postal Service enough latitude to innovate effectively?

  • on Nov 4th, 2013 in OIG | 3 comments

    Wow, how time flies. Five years ago we launched our first blog as a way to engage stakeholders and solicit input on important postal topics. We haven’t stopped blogging since – 282 and counting (and more than 670,000 views!). A lot has changed in that 5 years – not necessarily for the U.S. Postal Service but in the social media realm. Things happen fast in the social media world: Facebook went public last year and now stands at a $100 billion company; Twitter has reached more than 230 million active users; the number of blogs out there has surpassed the 180 million mark; and a constant stream of newer players like Instagram and Vine further boost the impact of social media.

    Our blogging experience has changed in that time as well. Over the past year, we have noticed that overall comments to the blogs have declined, but activity on our Facebook page has soared. We post each week’s blog to our Facebook page and often find that’s where the action is. For example, our May 6 blog, “Community Connection: Stamp Out Hunger Food Drive” yielded one lonely comment on the blog, but absolutely lit up on Facebook. As of October 18, 2013, our May 9 Stamp Out Hunger Facebook post was viewed by more than 3,000 people. Similarly, using our Twitter account to mention blogs can drive activity as people retweet and favorite what we post.

    No matter where you share them, we encourage your comments. Send them via blog comments, on our Audit Project pages, on Facebook, or tweet us using @OIGUSPS. Your comments have prompted audit projects, white papers, or even the need to turn something over to our Office of Investigations. We’d also like to hear your ideas on future blog topics. What would you like us to cover? Keep in mind, a blog is a small window into an idea, not the place for exhaustive research. Often, we just tee up an issue and provide the pros and cons on it and then let the public weigh in. But we are always open to ideas.

    It might seem ironic that stakeholders like to comment online about a hard-copy service that is as old as the country itself. But we think the juxtaposition is apt – the Postal Service is still a valuable infrastructure in an increasingly digital world. Social media provides stakeholders yet another outlet for “informing the debate” about what our postal system should be. We look forward to hearing from you. 

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