• on May 14th, 2012 in Strategy & Public Policy | 3 comments
    Do you ever wonder about the future? Will flying cars ever arrive? Are video phones here at last? Will the end of paper finally come? Businesses can greatly benefit from knowing a little about future possibilities. At a time of great social and technological transition, understanding what might lie ahead can help businesses – like the Postal Service - prepare themselves to adapt. Deutsche Post DHL, the logistics and delivery company, commissioned a study to look at the world in 2050. The study, Delivering Tomorrow - Logistics 2050, was prepared with the help of a firm of futurists and foresight experts. Through interviews with key experts, the study’s authors determined 14 key factors that could influence the future of logistics such as income growth and trends in trade regulation. Then, they investigated potential outcomes for these factors. The possibilities were combined into five potential visions of the future: • Untamed Economy – Impending Collapse – World income grows rapidly, and globalization continues. The sheer pace of the growth threatens to strain natural resources. Logistics firms are critical for transporting goods through a logistics supergrid. • Mega-efficiency in Megacities – People live in urban metropolises that have managed to solve many of the problems of dense urban growth such as traffic jams. Rural areas are left behind as economic activity becomes increasingly concentrated in these giant megacities, which are connected by logistics firms. • Customized Lifestyles – A revolution in 3-D printing lets people make goods very near where they live. This allows for an incredible increase in customization and individualization. It also means that there is far less need to transport goods across the world. • Paralyzing Protectionism – Globalization falters as countries retreat into protected regional trade blocs. Even the Internet splits apart. Technological development lags, infrastructure crumbles, and resource scarcity slows economic growth. Regional logistics champions carry goods, and customs clearance takes weeks. • Global Resilience – Local Adaptation – Natural disasters, crises, and attacks make resilience and redundancy critical. Businesses use adaptable technology, such as production facilities that can turn off and on as needed. Redundancy is expensive so standards of living are lower. Trade is regionalized rather than global, and logistics firms focus on security rather than timeliness. What do you think of these visions of the future? (Keep in mind the short descriptions above only hint at the full scenarios in the paper.) What role will the U.S. Postal Service play?
  • on Feb 22nd, 2012 in Strategy & Public Policy | 36 comments

    If you pay any attention at all to legislative efforts to address the Postal Service’s financial crisis, you’ll soon hear the phrase, “budget score.” Someone will say that a bill has a high score or a low score. But what is a budget score? What is the score for?

    Budget scoring is part of a broader process to keep federal spending in check. The Congressional Budget Office (CBO) assigns scores to bills to show how they will affect the federal budget deficit. (Unlike most sports, a high budget score is usually considered bad.) Even though Congress placed the Postal Service off budget in 1989 and the Postal Service does not receive federal money for operations, the Postal Service often gets caught up in budget scoring concerns for two reasons: The first is off-budget spending is included in the overall measure of the budget called the unified budget. The second is that the Postal Service is required to pay in funds for pensions and retiree health benefits to certain on-budget accounts.

    The OIG described the history of the Postal Service’s entanglements with federal budget concerns in the 2009 white paper, Federal Budget Treatment of the Postal Service. The paper showed how these entanglements stymied the ability to enact postal legislation – even legislation that would return the Postal Service’s overpayments.

    In a new paper released today, Budget Enforcement Procedures and the Postal Service, the OIG updates budget events since the 2009 paper and places budget scoring and the federal budget treatment of the Postal Service within the context of the federal budget process.

    Most of the Postal Service’s operational spending is off budget and not subject to the federal budget process. The OIG argued in 2009 that the Postal Service’s retiree benefit accounts should also be off budget and disentangled from the federal budget. Until that happens, however, it is important that the Postal Service and its stakeholders understand how the budget process and budget enforcement work. This paper attempts to explain these processes and how they can affect legislation.

    What do you think about budget scoring and the Postal Service? Comment below.

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

  • on Feb 13th, 2012 in Strategy & Public Policy | 12 comments

    According to the Postal Service, greater use of electronic communication continues to drive customers away from using First-Class Mail®. Instead of buying stamps, many customers pay bills online, send ‘e-invitations’ to friends and family, and simply press “Send” when they want to communicate. These shifting customer habits will continue to speed the migration away from traditional First-Class Mail. According to the Postal Service, First-Class Mail has dropped 25 percent and single-piece First-Class Mail – letters bearing postal stamps – has declined 36 percent in the past 5 years.

    Postal Service customers and others have complained that the planned consolidations and the elimination of overnight service standards will adversely affect them. On the other hand, the Postal Service claims that these consolidations are financially necessary and create a delivery network that more accurately reflects the current volume of mail.

    1. What are your thoughts on the consolidations? 2. How will the elimination of overnight service standards affect you? This topic is hosted by the OIG’s Planning, Innovation and Optimization Directorate. NOTE: An audit report, U.S. Postal Service Presents Network Optimization Initiative, shall be issued in tandem with this blog.