• on Dec 7th, 2009 in Finances: Cost & Revenue | 19 comments
    If the Postal Service is to recover from its current financial problems, it needs revenue. In addition to identifying additional sources of revenue, it must protect the revenue it is already due whether it comes in from the post office window, meters, online postage accounts, or from Permit accounts for business mailers. Ensuring that the Postal Service collects all of its revenue will help secure the agency’s position as a trusted service provider for years to come.

    That’s where you come in. What do you think are the greatest revenue leakage risks the Postal Service faces, and what are the best ways to protect that revenue? Now is the time to share your thoughts and help the agency.

    This topic is hosted by the OIG's Sales & Service directorate.

  • on Nov 30th, 2009 in Ideas Worth Exploring | 32 comments

    From public transportation to sports stadiums, venues use their prime real estate to sell space to advertisers and generate extra revenue. Take for example the Washington Metro transit system. Ad space is for sale everywhere — on buses and trains (inside and out) and even on train tunnel walls and floors.

    In these times of doing what it takes to maintain fiscal solvency, what if the Postal Service started selling its prime advertising real estate to generate revenue? Major advertisers might welcome the opportunity to place their ad on hundreds of thousand Postal Service trucks all over the country. Or smaller advertisers could take advantage of purchasing wall-space in a post office. The Postal Service actually explored selling advertising space around 2001 in a program called the Postal Ad Network, but it was discontinued after it raised much less money than initially expected. However, a major advertising slump hit right at the time the Postal Ad Network was rolling out.

    There are some major ‘what ifs.’ Who would manage the program and what would be charged for advertising? More importantly, what would the limitations be? When Major League Baseball proposed placing ads on bases, there was a major league backlash. How would the public react to advertising on Postal Service property? Would certain types of advertising be out of bounds? The Postal Accountability and Enhancement Act does not permit the Postal Service to undertake new nonpostal products. Would selling advertising on Postal Service property violate the law? And how would selling advertising space affect the Postal Service’s brand?

    Putting aside those issues, would it be worth it? And what kind of increased revenue would an advertising program like this bring?

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

  • on Nov 23rd, 2009 in Strategy & Public Policy | 14 comments
    We all know the Postal Service is going through rough times right now. Sometimes, when a situation is difficult, it’s useful to look to the past for perspective. Forty years ago today, there was no Postal Service (and no Office of Inspector General). The Post Office Department was 5 months away from an unprecedented strike, and 15 percent of the Postal Service’s FY 1969 revenues came from appropriations. Mail volume was 82 billion pieces. There were 739,002 employees and 43,220 post offices (including stations and branches).

    Three years earlier, mail operations at the Chicago Post Office had broken down for three weeks leading to a backlog of 10 million pieces. Sixteen months earlier, the President’s Commission on Postal Operations, known as the Kappel Commission, had released its report (Click here for the first part of the report). The first line read “The United States Post Office faces a crisis.” The report described several problems:

    • Customers were dissatisfied with inconsistent mail service following a period of rapid volume growth. Moreover, the Post Office Department had little knowledge of what products its customers wanted.
    • Employees experienced antiquated personnel practices, poor working conditions in many facilities, and limited opportunities for training or advancement. More than 80 percent of employees started and ended their careers at the same grade level. Some opportunities required political connections. historical carrier
    • The system of supervision was inadequate with supervisors isolated from management decisions, and relations between labor and management were poor.
    • The Post Office operated at substantial deficits financed by the government, and there was a chronic shortage of funds for capital investment.
    • Productivity was low as “[in] most offices men and women lift[ed], haul[ed] and push[ed] mail sacks and boxes with little more mechanical assistance than the handcart available centuries ago.”
    • Pricing was based on inaccurate cost systems, and the rates were set by Congress.
    historical workers

    The Kappel Commission diagnosed all of these problems as manifestations of a single root trouble: Management had no authority to manage. Their proposed solution was a government corporation.

    The Postal Reorganization Act of 1970 (PRA) became law the August following the strike. The PRA did not include all the Kappel Commission’s recommendations, but they were highly influential. The Post Office emerged as a new, much more independent Postal Service.

     

    historical mailroom

    Are there any lessons for today in the problems of 40 years ago? Postal operations were losing more money in 1969, but volume was growing. Are prospects better or worse today? What will future commentators say about the Postal Service 40 years from now?

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

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