• on Sep 23rd, 2013 in Products & Services | 19 comments

    Until the early 1970s, citizens applying for passports had to wait in long lines at one of 10 U.S. Department of State passport offices or at a federal or state court. The traveling public was not happy about the inconvenient locations of these offices or the hours’ long wait to submit an application, and they let their elected officials know. The solution allowed post offices to accept and process passport applications on behalf of the State Department. The passports were then mailed directly to the applicants.

    This arrangement has proven to be a highly successful marriage of government services. With many post offices offering passport services, it has become far more convenient for citizens. Today, customers can go online to find the nearest post office with passport services and also find the number to call to make an appointment. (Most post offices require customers to make an appointment for passport service.)

    The execution fee for a passport is $25. In fiscal year 2012, the U.S. Postal Service processed 5.7 million passport applications for revenue of $142 million. With the additional services it offers, such as passport photos and return postage, the Postal Service’s total revenues from passport services in 2012 was $182 million. It is a nice chunk of change for a service the Postal Service does not need to market aggressively. Still, the Postal Service has seen a significant decline in passport revenue over the past 4 years. In 2008, it earned $283 million from passport services.

    The decline in passport revenue could be attributed to a few things. First, the weak economy has undoubtedly reduced international travel over the past 4 years. It could also be that 2008 was an especially strong year for passport revenue because changes taking effect in 2009 required a passport to return to the U.S. from travel to Mexico, Canada, and the Caribbean. However, postal staff reduction and facility closures could also be playing a role. Customers have complained about waiting too many days or weeks for a passport appointment at their Post Office or about being directed elsewhere for service.

    Why do you think passport services revenue has declined so dramatically in the past few years? Is there a way the Postal Service could improve the process? What changes could it make to maximize passport revenues?

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