• 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 Jun 30th, 2014 in Products & Services | 7 comments

    Maybe this is the first time you’ve heard the term “collaborative consumption,” but even if it’s not, chances are you’ll be hearing it a lot more. It refers to an economic model based on renting, lending, and sharing goods instead of buying them. In fact, not long ago, Time magazine listed it as one of “10 Ideas That Will Change the World.”

    Collaborative consumption is very popular among Millennials, who increasingly constitute a culture that likes to rent just about everything from clothing to tools. For one thing, rental prices are lower than purchase prices, which not only is nice on the wallet but also significantly increases the number of items from which to choose.

    Rental culture is not entirely new – remember DVDs from Netflix? – but it is growing. In 2013, Forbes estimated the revenue from the sharing economy will exceed $3.5 billion, representing more than 25 percent growth over the previous year.

    While people certainly do still buy things, especially online, the ownership culture primarily involves one-way shipping except for the occasional returns. Rental culture guarantees two-way shipping every time, or double the revenue, for carriers like the U.S. Postal Service.

    Some think the Postal Service is already well-positioned to be a major player in rental culture shipping. It delivers to rural or remote areas at the same prices as urban addresses while other carriers charge more to deliver to rural areas. Moreover, the Postal Service’s roughly 30,000 post offices across the country mean renters wouldn’t have to look far for a shipping point when return time comes, or just put it in the mailbox for the mail carrier to take. And flat rate boxes mean renters immediately know the cost of shipping without having to weigh anything.

    Tell us what you think: Do you use these kinds of rental services? How should the Postal Service actively pursue the rental-shipping market? Or do you think rental culture is really just a fad? 

  • on Feb 9th, 2009 in Products & Services | 7 comments
    Merchandise Return Service and Parcel Return Service allow merchants to pay the shipping charges for their customers' returns. Merchandise Return Service is the end-to-end version, and Parcel Return Service provides workshare discounts for mailers willing to pick up the packages within the Postal Service's network. The U.S. Postal Service Office of Inspector General independently audits the efficiency and effectiveness of Postal Service programs such as Merchandise Return Service and Parcel Return Service. However, OIG employees are also customers of the Postal Service with their own experiences. Nicole, an OIG employee, recently used Parcel Return Service. She agreed to share her experience on Pushing the Envelope.

    For the 2008 holiday season I tried the all-online shopping approach for the first time. I had my items picked out, purchased, delivered to my door, and even wrapped by December 12! It was an unprecedented feat for me personally and I was overjoyed at the lack of stress involved — that is until I found out the big surprise gift of a digital camera for my Mom turned out to be duplicated by another friend of hers! What does this have to do with the USPS OIG blog? We’ll get there…

    After resigning myself to the fact that the other camera was actually better than the one I purchased, it became clear that I would have to return the item, and my dread mounted. What a hassle — there was no ‘store’ for the virtual vendor I purchased it from, so I’d have to find the invoice, repackage the thing, and get it back to the online seller. Just thinking about how long that would take gave me a headache. That is until I logged into the vendor site and saw that they had something called USPS Parcel Return Service. I thought whoa, what is this? And to my delight, I found that with two mouse clicks and my printer, I could get the return invoice for the package and a pre-paid USPS shipping label for the box! It took me less than 5 minutes to plop the item and invoice in the box, fold and tape the label to it, and be on my way to drop it at a local post office. There was even an option to schedule a pickup of the package free of charge by my local carrier, but I felt entirely too guilty at how easy it was to that point to take advantage.

    So, I stopped by the local post office on my way to work, went in the main lobby, and dropped it straight in the parcel box. E-mails from the vendor confirmed the arrival of the return package, and just this week I received the refund of the purchase price. Easy as that! So next holiday season, I’m not going to let this minor blip keep me from shopping online. Instead, I’m going to look for more vendors who offer this convenient service and online-shop away!

    Have you used Parcel Return Service or Merchandise Return Service? Was your experience similar to Nicole’s? If not, what happened, and how would you improve these services?