• on Mar 23rd, 2015 in Post Offices & Retail Network | 36 comments

    Reshaping a postal network doesn’t happen overnight. Especially one built to handle mainly letters and flats and not the tremendous anticipated growth in parcels. The Postal Service is attempting to tackle realignment in two phases, playing out over 4 years.

    Phase one was completed in 2013 and resulted in 141 consolidations for an expected cost savings of about $865 million. To achieve full cost savings, however, the Postal Service also had to reduce service standards for First-Class Mail. Phase two, which started in January and will run through late summer, calls for consolidating 82 mail processing facilities and eliminating most overnight delivery of First-Class Mail. It will also change service standards for Periodicals Mail. All other products will stay the same.

    The Postal Service launched its overall consolidation plan in 2012 to adjust the size of the network and workforce to the reduced demand. The plan calls for fewer processing facilities and for machinery to operate longer and more efficiently. Total mail volume has declined 27 percent since its peak in 2006, and single-piece First-Class Mail – primarily correspondence, bill payments, and greeting cards – has been hit even harder. It has declined by more than half in the past decade.

    Speaking at the February Mailers’ Technical Advisory Committee meeting, postal officials said they are confident consumers will not notice the service standard changes. Surveys suggest most people don’t know what the service standards are, but they do care when their mail arrives in their mailbox. So the Postal Service is working to ensure consumers receive their mail at the same time each day. They also reminded people that consolidation doesn’t necessarily mean closing. Some facilities could be repurposed for other services.

    Business mailers have generally supported efforts to eliminate excess capacity and reduce costs, with the exception of those whose business model depends on overnight service. But mailers also worry that some costs could be shifted to them. Unions have opposed the consolidation plan, arguing it downgrades service and delays mail at a time when the Postal Service should be stepping up its efforts to compete with digital communications. As for consumers, the Postal Service may be right that they won’t really care – unless they notice a change in delivery performance. It’s also worth noting that service standards are not changing for Priority Mail or Package Services, so the Postal Service should be able to satisfy customers’ growing demand for packages.

    Are you concerned that network consolidation has resulted or could result in mail delays? Or do you think network rationalization is necessary to reduce costs? If you oppose consolidation, how do you recommend the Postal Service better match its capacity to demand?

  • on Sep 30th, 2013 in Products & Services | 6 comments

    This is the time of year when retailers, nonprofit organizations, and other mailers step up their holiday advertising mailing campaigns. Volume spikes in this period, known as the fall mailing season, which then gives way to the even-busier holiday mailing season, when personal correspondence and packages spike. The U.S. Postal Service makes most of its money for the year in the period between Labor Day and Christmas.

    Commercial mailers work closely with the Postal Service to help it prepare, but the fall mailing season has always presented operational challenges. In some ways, it is highly efficient because facilities are staffed for busy times. But postal equipment, including mail tubs, trays, mail transporting equipment, and pallets, have to be in the right places at the right times. In past years, commercial mailers have complained about shortages of mail equipment. Ideally, mail sorting equipment should run at optimal throughputs for maximum efficiency, and the online system mailers use to set up mail entry appointments should work seamlessly. Still, mail delays can occur for a variety of reasons, including mail processing errors, inefficient use of automation equipment, congestion on the facility floor, and working from incomplete operating plans.

    The Postal Service’s fall mailing season plan attempts to eliminate roadblocks to swift processing and delivery. This year, it has ordered extra mail transport equipment and looked at ways to shift volume from heavily used equipment to under-used processing equipment. The Postal Service is also relying on the increased visibility from the Intelligent Mail barcode as a diagnostic tool to uncover bottlenecks. These tools helped it reduce mail delays in fall 2012 by showing “pinch points” and helping managers act on that information to reduce mail cycle times.

    This year, however, could prove especially challenging as the Postal Service continues with its network consolidation implementation. It has completed more than 150 facility consolidations and has moved more than 700 pieces of equipment in support of the consolidations. With the late date of Thanksgiving this year, the end of fall mailing season pushes right into the peak mailing season for the holidays.

    Mailers, what have your experiences been like so far this fall mailing season? Are there noticeable improvements in mail equipment availability, mail delivery times, and appointment opportunities? Has network consolidation posed any unexpected challenges?

  • on Nov 19th, 2012 in Ideas Worth Exploring | 5 comments
    Twenty years ago, when professional sporting teams started selling naming rights to their stadiums and arenas, many purists called it a low point in the commercialization of sports. But today, the number of arenas and ballparks not named after a corporate sponsor is small. For revenue-seeking team owners, it is just too hard to pass up the money that comes with selling your stadiums’ name. Strategy, business development and marketing all play huge factors in naming-rights deals, with top prices for these deals reaching about half a billion dollars, according to Sports Business Journal. As a business-centered organization looking to boost revenues, does the U.S. Postal Service have opportunities to sell naming rights? The idea of selling the naming rights to an entire Post Office might not be palatable to Congress, as lawmakers like to name post offices after fallen soldiers or local heroes. But what about selling space in parts of the Post Office? For example: this retail counter brought to you by XYZ Co.? Sides of vehicles or automated postal centers in high-traffic areas of retail centers could also hold valuable advertising space. With its national reach, yet local presence, the Postal Service is visible in every community nearly every day. Companies and nonprofit organizations would likely find the opportunities to reach such a large audience appealing. Another option might be to appropriate advertising space to other government agencies. For example, a state health department or the Centers for Disease Control and Prevention could use space on postal vehicles or in retail lobbies to announce a public health campaign. The Department of Energy or local governments could use retail space to tout energy conservation practices to citizens. This approach would also tie in with a larger vision of using post offices to connect citizens with other government services. Would such offerings tarnish the Postal Service’s image and degrade what is still considered a public institution held in the public trust? Or should the Postal Service think creatively about new ways to use its large physical network? Would naming rights be an easy way to generate revenue in tough economic times? Or should the Postal Service focus on its core business?

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