• on May 18th, 2015 in Mail Processing & Transportation | 2 comments

    With all those designer shoes, cutting-edge electronics, and trendy toys shipping into our homes via ecommerce, it’s only logical that sometimes the shoes won’t fit, the electronics won’t work, and the kids will have already moved on to the next hot toy.

    The bottom line is that some of the stuff we buy needs to be returned. And that’s known as reverse logistics.

    As the offspring of the enormous ecommerce business, domestic shipping returns currently generate about $3 billion annually in revenue for the package delivery industry, and could reach $4 billion by fiscal year 2016. Shipping returns’ first cousin, package forwarding, is also booming as customers increasingly expect more control over when and where their packages will be delivered.

    This trend certainly isn’t lost on the industry. FedEx, for example, expanded its reverse logistics prowess with its $1.4 billion purchase of GENCO Distribution System Inc., a third-party logistic provider. And Britain’s Royal Mail is so interested in reverse logistics that it even did a study that profiled the types of people who frequently return online purchases. (Turns out there are four: the returns addict, the duplicate dealer, the bargain hunger, and the swap shopper.)

    The U.S. Postal Service also is active in the returns and forwarding markets, and offers a variety of products and services, such as Parcel Returns Service, Bulk Parcel Return Service, and two Premium Forwarding Services – one for homes and one for businesses. Recently, the Postal Service has been promoting its built-in advantage over other providers – its 6-day-a-week delivery and its free package pick-up service.

    But can it do more to get its chunk of the reverse logistics market? We think so. Our recent white paper on the topic found several services the Postal Service could offer to take advantage of its strengths. First, it could consider providing digital parcel labels to the growing crowd of smartphone users. With this technology, the customer notifies the merchant of a pending return, the merchant sends a quick response (QR) code to the customer’s phone, the customer then schedules a carrier pickup, and the carrier scans the QR code, prints a label from a handheld device, and takes the package.

    Next, warehousing is a big piece of the logistics business as many small businesses lack space to house the products they ship to customers. We suggested the Postal Service put its excess facility space to good use by offering shipping and return services to businesses that have combined inventory storage and shipping needs.

    Finally, the Postal Service could offer customers an alternative delivery option in which they could pick up purchases at any of the 32,000 post offices. This would appeal to those who want packages sent to a location of their choosing, rather than wait for the item at home or work.

    Are you a frequent returner? What do you look for in returns service? What could the Postal Service do to ease the return or forwarding of goods?

  • on May 1st, 2015 in Mail Processing & Transportation | 1 comment

    Here’s the good news: Mailers accept and support the U.S. Postal Service’s Seamless Acceptance (SA) program. And here’s the bad news: Implementing the program hasn’t been very seamless.

    Ongoing data integrity problems, among other concerns, have delayed full implementation of the program. We found evidence of inaccuracy in the data and mailers raised similar concerns, prompting them to ignore the data, according to our recent audit report.

    Not the most auspicious start to a program designed to increase the efficiency of commercial mail entry, verification, and payment. Still, everyone involved wants the program to succeed. SA is expected to make mail acceptance faster and less complex, standardize the acceptance and verification process, and allow for a trend-based quality measurement system.

    Seamless Acceptance uses electronic documentation from a commercial mailer, intelligent mail barcodes, and various scanning devices to verify that the letter and flat mail a mailer is entering meets the Postal Service’s acceptance thresholds and that proper postage is collected. Twenty-nine major mailers have volunteered to participate in SA, tendering about 1.7 billion mailpieces each month. Another 288 mailers volunteered to participate in a preparatory phase of the program known as Seamless Parallel, which helps introduce mailers to SA.

    Our recent audit report noted that while the Postal Service has reported progress in implementing SA, delays continue due to ongoing data integrity issues, as well as customer service and communications hurdles. The Postal Service’s initial goal was to have the full SA program in place by last September. But a series of delays has pushed that date back to July 2015. Notably, problems remain with the scorecard data provided to mailers; postal staff members have limited access to relevant reports and data; and there is inconsistent communication between the Postal Service and participating mailers.

    If you are a commercial mailer currently participating in SA, what are you seeing in terms of data quality, customer service, and communication? If you are not a current participant, are you interested in joining the SA program? If not, what is holding you back?

  • on Mar 16th, 2015 in Mail Processing & Transportation | 1 comment

    This is the second blog in our two-part series on sustainability. Last week’s blog, Green Scene, focused on recycling efforts.

    When do growth and reduction go hand-in-hand? When the world’s posts are trying to grow their business but reduce their carbon footprint.

    The 25 national postal operators that make up the International Post Corporation (IPC) have made great strides toward achieving their carbon dioxide emission reduction goals, but they hit a bump in 2013 and 2014. A coalition of the world’s industrialized posts, the IPC is aiming to cut carbon dioxide emissions by 20 percent by 2020. Half of the IPC members have already reached the target. But last year marked the first increase in emissions from the use of heating and transport fuel for the group as a whole since the IPC environmental measurement program began in 2009.

    One reason for the backsliding is actually a good problem. The global growth in e-commerce, which has boosted the posts’ number of parcel deliveries, is making emission reduction targets more challenging. Especially harsh winters in some countries and a big increase in size in one of the operator’s delivery networks have also contributed to the posts’ higher fuel consumption.

    IPC officials are stressing the importance of switching to renewable energy, either self-generated or purchased, wherever possible.

    The U.S. Postal Service is one of the 25 posts taking part in the IPC Environmental Measurement and Monitoring Program. It’s also one of the posts that saw its transportation fuel use increase. In its 2014 Sustainability Report, the Postal Service notes that “an aging [postal vehicle] fleet and the need to service more delivery points are pushing our fuel demand upward.” Still, the Postal Service must continue its efforts to manage its fuel resources as efficiently as possible, for both its own fleet and its contracting vehicles. (Our 2014 audit report offered recommendations on encouraging fuel efficient practices in highway contract routes.) This should get easier in the next couple of years as the Postal Service replaces its long-life vehicle fleet. This summer the Postal Service will select vendors to build new vehicle prototypes and it will award a contract of up to $6.3 billion over several years beginning in 2017.

    With continued parcel growth expected, how can the world’s posts meet the demands of customers while reducing their carbon footprints? What technologies might benefit the Postal Service specifically? 

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