• on Sep 16th, 2013 in Delivery & Collection | 7 comments

    As online shopping has become the norm for many Americans, it has brought operational changes to both brick-and-mortar retailers and online retailers. Shipping costs are now a major consideration for companies. Retailers are working to control their shipping costs as their ebusiness grows, with the traditional retailers relying on their extensive network of stores to reduce shipping costs. Instead of shipping goods from centralized warehouses to far-flung customers, major retailers, such as Wal-Mart, Best Buy, and Gap Inc., deliver from stores close to their customers whenever possible.

    Amazon.com is focused on building more local warehouses and is also investing in its own delivery fleet. Other retailers have made merchandise available to eBay to sell in select cities with its same-day delivery service, eBay Now. Shipping merchandise from locations close to where customers reside allows retailers to save on shipping costs, which are set based on the distances shipments travel.

    Customers are expecting ever higher levels of service. Same-day delivery to a growing number of customers helps retailers provide customers something close to the immediate gratification of an in-store purchase. So far, however, this service has been limited to customers in cities where a decentralized network can serve them.

    While lower shipping costs is good for the retailer and its customers, the shipping giants are likely to feel the pinch. One retailer’s reduction in shipping costs is a courier company’s reduction in revenue. Ultimately though, these e-commerce shipping strategies should improve the online shopping experience and accelerate its growth, which will boost the number of packages sent. That’s a boon for all package delivery companies, including the Postal Service.

    With its reliable delivery network that serves every address in the United States, the Postal Service should be well-positioned for this shift toward fast, local delivery of online purchases. However, some challenges in its network processing capabilities and delivery operations could hinder its ability to capture a larger segment of the package delivery market. What ways could the Postal Service capitalize on these trends? What improvements does it need to make to position itself as the leader in shipping services?

  • on Jul 3rd, 2013 in Delivery & Collection | 14 comments

    “If you are generally well-equipped to deal with a zombie apocalypse, you will be prepared for a hurricane, pandemic, earthquake, or terrorist attack.”U.S. Assistant Surgeon General Ali S. Khan, Centers for Disease Control and Prevention

    Hurricanes, floods, wild fires, snowstorms, tornadoes, zombie apocalypse – you name it, the U.S. Postal Service is prepared to deliver. Part of the Postal Service’s extensive operational planning includes contingency plans to make sure mail gets delivered safely after every type of weather event, power outage, and undead uprising. Ok, maybe the Postal Service isn’t preparing for a zombie apocalypse, but its emergency preparedness plans could seemingly handle even that type of catastrophe.

    The Postal Service’s immediate priority after a storm or major weather event is the safety of its employees. Once safety issues are addressed, the prompt delivery of mail and packages to affected areas becomes the focus. The resumption of mail delivery to a disaster-affected area is often a welcome event in recovery. Citizens are frequently without power and phone service, which severely limits communications. Mail delivery allows for the exchange of information, including relief checks and government services, and can even provide a small feeling of a “return to normalcy” for citizens. Sometimes after a storm, a letter carrier is the first direct contact a citizen has with another person. Postal employees are often dealing with disasters in their own homes, yet show up faithfully for work.

    Halfway into 2013 and the year is shaping up to be an historic weather one. Winter storm Nemo, May tornadoes in Oklahoma, wild fires in Arizona, late spring snowstorms from Arkansas to Minnesota, flooding in many parts of the country, and record-breaking heat in the West all took place in just the first 6 months of this year. And hurricane season has only just started. This puts added pressure on the Postal Service to have sufficient controls in place to ensure employee safety and mitigate interruptions to service. Adding to the contingency challenge is the fact that postal facilities are often damaged in these weather events, forcing rerouting of mail and relocation of retail services. For example, the October 2012 Hurricane Sandy, which caused extensive power outages and infrastructure disruptions up and down the east coast, resulted in numerous postal facilities being damaged.

    Share with us your experiences with the Postal Service during major weather events. Could the Postal Service improve its preparation and response efforts in dealing with extreme weather to minimize disruptions? 

  • on Mar 11th, 2013 in Ideas Worth Exploring | 8 comments

    The U.S. Postal Service adds more than 600,000 new delivery points each year, mostly in the form of new residential homes. While most new residences include cluster boxes rather than to-the-door delivery to reduce costs, delivery remains the Postal Service's largest cost center. Canada Post, which has suffered losses recently after years of profits, has introduced a $200 per address charge that it is assessing housing developers for installing community mailboxes. Canada Post claims the charge “is in keeping with how other infrastructure costs are shared by utilities and other services." Canada Post, which adds almost 200,000 new addresses a year, could earn tens of millions of dollars from the fee and it would offset the added costs of new delivery points. Housing developers in Canada have been fighting the charge, arguing that it is unfair to assess new homes only, which they say receive substandard delivery service compared to older homes and apartment buildings that get delivery to the door. In the United States, the Postal Service does not charge a fee to set-up and deliver to a new address. New delivery points are generally more profitable than old ones because they generate on average more volume and revenue and they cost less due to the increased use of lower cost options such as curbside and cluster boxes. Still, other utilities, such as gas, electric, and cable companies, charge customers a new service fee when they move or start service. Cities and counties also often charge an administrative fee for services, such as water, when a customer changes or adds a new address, sometimes in the $50 range. The City of Mountain View, CA, charges a hefty administrative fee of $195 to change or add a new address. Should the Postal Service recover the costs associated with new delivery points by charging customers a one-time “set-up” fee for their new home or business location? Or does that effectively penalize a new homeowner for receiving what is usually a more cost-effective form of delivery (cluster boxes)? If the Postal Service were to charge, should it only charge for the administrative costs it incurs to set up new addresses, such as completing and reviewing Postal Service forms and updating to the Address Management System and Delivery Sequence File? Should it charge the developer as Canada Post is doing? Or should it retain the status quo and keep it so that costs are shared by all ratepayers? Are there other solutions?

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