• on Aug 4th, 2014 in Delivery & Collection | 35 comments

    Delivery is its bread-and-butter. And service is in its name. So, the U.S. Postal Service takes pride in delivering mail to every address in America.

    But declining mail volume, changes in the network, a downsizing of its workforce, and evolving customer needs have led to changes in delivery. Further, a wide range of variables, such as weather, employee absences, or new carriers to a route, can affect delivery every day. These changes and variables pose challenges to the Postal Service in meeting its targeted “24-hour clock initiative,” which is to collect, distribute, and deliver mail on time and to have 95 percent of letter carriers off the street by 5 p.m.

    In recent years, more carriers have been returning after 5 p.m. That percentage increased nationally from 25 percent in fiscal year (FY) 2011 to 38 percent in FY 2013. Mail delivery after dark raises carrier safety concerns while late mail makes consumers unhappy.

    Our recent audit report looked specifically at the Capital District, which experienced a 14 percentage point increase in city carriers returning after 5 p.m. We found the increase was due to (1) delayed delivery of mail from the processing facilities to the delivery units, and (2) supervisors failing to properly supervise city delivery operations. Our recommendations centered on modifying operating plans to get mail to the delivery unit earlier in the day and on adhering to policies and procedures for supervising city delivery operations.

    Also, we encouraged management and union officials to work together to address carrier safety. External stakeholders have already offered some ideas worth considering, such as brightly colored, reflective clothing to make carriers more visible, and realigning delivery routes so carriers can start earlier in dangerous areas.

    We welcome your suggestions as well. What more could be done to get carriers off the streets by the targeted 5 p.m. return time? Given all the variables that can affect the ability to complete deliveries by 5 p.m., what additional precautions could be taken to enhance carrier safety? 

  • on Jul 21st, 2014 in Delivery & Collection | 12 comments

    The Internet may have eaten into the U.S. Postal Service’s First-Class Mail volume and revenue, but digital devotion does bring good news, too. Package shipping is on the rise, due in large part to the ever-increasing popularity of online shopping. The Postal Service’s future could brighten considerably because of this expanding market, but is the Postal Service prepared to compete effectively in it?

    Our new white paper, Package Services: Get Ready, Set, Grow!, essentially probes that question and comes up with several intriguing findings. As our auditors have noted, the Postal Service has done a good job of managing package growth in terms of mail volume and workhours. But it could do more. And it will have to, not only because UPS and FedEx are offering modernized, end-to-end products and services in response to customer demand, but also because some e-tailers, like Amazon, are expanding to offer their own shipping and delivery options.

    Last year American businesses and consumers spent more than $68 billion to ship packages domestically; the Postal Service accounted for almost two-fifths of the total volume but less than one-fifth of the total revenue. That worked out to an average $3.37 of revenue per package for the Postal Service. UPS’s and FedEx’s average revenue per piece for their domestic packages were $9.39 and $9.70, respectively. The main reasons for the disparity? The Postal Service excels in lightweight and last-mile package delivery, which generate comparatively lower revenues.

    The white paper says the Postal Service could increase its revenue-per-package average by adding new services that customers want. For example:

    • Improving tracking service and package-return service
    • Offering email and text alerts to parcel senders and recipients
    • Specifying time-windows for delivery

    What do you think? How could the Postal Service expand its dominance in lightweight packages to higher-revenue packages? What package services would make you use the Postal Service more than you do now? How much online shopping do you do compared to in-store shopping?

  • on Jun 23rd, 2014 in Delivery & Collection | 8 comments

    When you think German ingenuity, perhaps high-end automobiles or precision cameras come to mind. Might be time to add individual residential parcel box lockers to the list.

    Don’t laugh. Deutsche Post DHL plans to roll out individual locked parcel boxes to interested German households, and if successful pilot tests in two cities are any indication, the idea could prove to be a lucrative hit.

    The German postal operator is convinced residential parcel boxes are a key element in its strategy to secure more of the growing package business. Deutsche Post sees these home-based parcel delivery lockers as a more convenient option for e-commerce customers, who would otherwise probably have to trek to their local shop or parcel terminal to collect their parcels.

    Deutsche Post isn’t claiming it’s the greatest development since sliced bread, just since the invention of the mailbox. Customers can choose among different designs, sizes, colors, and mounting methods. In addition to receiving parcels, they can also place outgoing packages in the box.

    The parcel lockers are aimed at single-family and two-family homes or those apartment complexes with enough space and easy accessibility for delivery. At a rental price starting at 1.99 euros ($2.70) per month or outright purchase starting at 99 euros (about $135), it’s not clear how many customers will jump on the offering. But Deutsche Post thinks the convenience factor and improved customer experience will win over a number of residents.

    Home parcel lockers are another way the German postal operator is trying to serve customers in a rapidly changing ecommerce market, where double-digit growth is expected to continue for the next 4 years. The U.S. Postal Service is also seizing the opportunities ecommerce provides, and its 20 percent growth in package revenue over the past few years is a testament to the promise of this market.

    Do you think home-based parcel box lockers would work in the U.S.? Would you be willing to pay a small monthly rental fee or buy a box for a more secure home delivery of parcels? If yes, how much would you be willing to pay?

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