• on Oct 5th, 2009 in Pricing & Rates | 23 comments
    Stamp prices are traditionally in whole cent increments. That means it is difficult to target a particular percentage increase. For instance, a one-cent increase on the 42-cent stamp would have been 2.4 percent; while the two-cent increase was 4.8 percent.

    Postal price increases are now limited by an inflation-based “cap” for each class of mail, and in First-Class Mail, the price of a stamp is a major component of the average revenue per piece for First-Class Mail. As such, the price change for the “stamp” plays a large role in the calculation of the average for the class. Other prices in First-Class Mail have to be set to bring the average back to the cap. This can make it difficult to meet many of the other pricing objectives in the class such as setting workshare discounts equal to the cost savings. It might be easier to meet the objectives if the stamp price were in a smaller increment.

    In any event, how important is it that the stamp’s price is in whole-cent increments?

    Since stamps are generally purchased in booklets or coils does it matter whether the individual price is rounded to a penny? Could increments larger than a penny be accommodated in the price cap environment? What other issues should be considered regarding the stamp price?

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

  • on Sep 28th, 2009 in Labor | 190 comments
    Silly Signs, Silly Rules –- Know Any?

    Workplace rules exist for a reason. Some rules are designed to protect employees’ rights and their safety, while others protect the employer and workplace. Then there are some rules that are just plain silly, and we ask ourselves why are they even are in place.

    Sometimes the best way to find these rules is to ask. Last March, Major General Michael Oates of the Army’s 10th Mountain Division asked for information on the stupidest rules or policies in the Army in his Mountain Sound Off blog. Soldiers commented on everything from uniform regulations to policies on leave. FederalTimes.com borrowed the same idea and asked its readers, “What are the dumbest workplace rules affecting you?”

    Since we know you aren’t shy, we thought we’d ask you the same question about the Postal Service. What Postal Service workplace rules are hindering you from doing your job? Are there rules or processes in place that no longer apply or need to be changed to meet today’s business needs? Let us know what you think.

    This blog is hosted by the OIG's Risk Analysis Research Center (RARC).

  • on Sep 21st, 2009 in Mail Processing & Transportation | 90 comments
    Keep Sunday Operations?

    We’ve all heard the bad news. Mail volume in fiscal year (FY) 2008 totaled 202.7 billion pieces, a decline of 9.5 billion pieces or 4.5 percent compared to the previous fiscal year. Mail volume has declined even further this year. At the end of the last quarter, mail volume was down more than 12 percent from the same period last year. Most recently, the Postal Service lost $2.4 billion in the third quarter of FY 2009 and projected a net loss of more than $7 billion for FY 2009.

    As a panelist during the August 6 Senate subcommittee hearings on the Postal Service, Postmaster General Jack Potter once again focused on the need for 5-day delivery, greater flexibility, and the elimination of some network infrastructure. During the same hearings, the Government Accountability Office (GAO) recommended urgent action to streamline the mail processing and retail networks as the Postal Service no longer has sufficient revenues to cover the cost of maintaining its large network of processing and retail facilities.

    End Sunday Operations?

    The reality of the current situation is that in many areas the Postal Service has an excess of equipment, staff, and facilities to process a declining volume of mail. Given the harsh economic conditions faced by the Postal Service today, looking at opportunities to cut costs by streamlining inefficient operations or eliminating unnecessary ones makes good business sense.

    One area for consideration is the elimination of Sunday mail processing operations. In many Processing and Distribution Centers around the nation, mail processing activities are run on Saturday night and into Sunday just as they are the rest of the week.

    With mail volume declining, should the Postal Service reduce mail processing operation to 6 days a week, rather than the traditional 7 days, and allow employees to have Sunday off?

    This blog is hosted by the Network Operations directorate.

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