The Pushing the Envelope blog recently described some of the barriers that have prevented the Postal Service from optimizing its network of retail facilities. This week we’d like your thoughts on the factors the Postal Service should consider in developing a retail network for the future. If the Postal Service were to rebuild its retail network from scratch — focusing on today’s consumer behaviors and needs — would it look as it does now? Today, there are about 32,000 brick and mortar postal-operated retail facilities. However, the Postal Service generates about 35 percent of retail revenue through alternative access channels. For example, customers can buy stamps and access postal services at http://www.usps.com/, self-service kiosks, grocery stores, retail outlets, and privately operated shipper locations. The availability of alternatives combined with declining mail volume and changing consumer needs has led the Postal Service to renew its efforts to optimize the retail facility network. In recent months, the Postal Service has initiated action to address some of the institutional barriers that have inhibited modernizing the postal retail network. For example, in July 2011, the agency published final rules to improve the Post Office™ closing and consolidation process. However, public debate looms over this initiative. Numerous news articles have circulated about the Postal Service’s plan to study thousands of retail facilities for discontinuance opportunities, some questioning whether the final rules conflict with postal laws. Others maintain that Post Offices are essential to keeping communities connected and businesses strong and therefore should remain open even if they are not profitable. What should the Postal Service consider as it seeks to transform its retail network to meet future consumer needs? This blog is hosted by the OIG’s Network Optimization Directorate.
on Aug 29th, 2011
in Products & Services
| 5 comments
on Aug 18th, 2011
in Mail Processing & Transportation
| 31 comments
The U.S. Postal Service’s network was designed to deliver First-Class Mail in 1 to 3 days. If you drop a First-Class letter going to a local address in the mail, you can expect it to be delivered the next day. These basic delivery standards date from a time before e-mail and other electronic methods of of communication. Now, as some First-Class Mail shifts to electronic alternatives, are these service standards worth the cost? The overnight First-Class Mail service standard requires the Postal Service to keep its processing plants open through the night and on Sundays. The Postal Service needs more labor, machines, and facility space to meet the compressed time schedule. Two trips are often needed to take mail to the delivery unit so that carriers can start sorting manual mail while machines at the plant finish sorting automated mail. In addition, the tight transportation windows required by the overnight service standard limit the size of plants’ service areas, reducing the Postal Service’s ability to consolidate the network. The 2-day and 3-day standards for First-Class Mail and Priority Mail can also add to costs. Often the need to meet service standards means that First-Class Mail and Priority Mail have to travel by air rather than less expensive ground transportation. Some of the Postal Service’s largest business mailers have stated they value consistency over high speed and would tolerate slightly slower service to save costs. As the Postal Service examines many different alternatives to improve its financial position, could relaxing service standards be an option? The OIG asked Christensen Associates to examine the costs that could be avoided by relaxing service standards by 1 day. Christensen estimated the Postal Service could save up to $1.5 billion if service standards were loosened by 1 day for its higher speed products (First-Class Mail, Priority Mail, and Periodicals). To learn more, read the recently released white paper Cost of Service Standards. What do you think? Should the Postal Service relax the overnight service standard? Should it continue to use air transportation for First-Class Mail? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
on Aug 15th, 2011
in Products & Services
| 18 comments
In today’s world we have the opportunity to do just about anything with just the click of a mouse and a few key strokes. Recent studies show online retail sales continuing to grow despite the economic slowdown and decline of overall retail sales. A previous blog, Could Radio Frequency Identification Make the U.S. Postal Service the Premier Delivery System, stated, “Last year Americans spent $155.2 billion shopping online. This year Americans are projected to spend more than $190 billion.” Purchases made online have to be shipped and this provides a great opportunity for the Postal Service to increase parcel delivery service. The Postal Service delivers almost half the world’s mail and more than 171 billion pieces annually, of this amount, roughly 3 billion are packages (Source: 2010 Report on Form 10-K, United States Postal Service). In addition, the Postal Service is often the last mile option for delivering FedEx, UPS and DHL packages. In 2007, if given a choice, 46 percent of consumers would select the Postal Service to deliver their packages.(Source:Package Delivery Study conducted by comScore, March 2007.) The Postal Service has received several ideas for improving its parcel delivery service. Many suggest the Postal Service could be more competitive if it offered an improved track and trace and confirmation system. Other suggestions include reliable on-time delivery, increased speed of service, and a better loss and damage policy. This blog is hosted by the OIG’s Sales and Service Team.