• on Jul 4th, 2011 in Strategy & Public Policy | 4 comments
    In response to a Government Accountability Office report and a Congressional request, the Postal Service introduced its Transformation Plan in 2002. Since then, the Postal Service has seen many changes, including a new postmaster general (PMG) and senior management team. Mail volume has declined due to electronic diversion and the recession. In addition, the Postal Accountability and Enhancement Act of 2006 changed how the Postal Service operates and conducts business. The Postal Service released its plan, Ensuring a Viable Postal Service for America: An Action Plan for the Future, in March 2010. The plan outlined cost-cutting, increased productivity, and legislative and regulatory changes necessary to maintain a viable Postal Service. In December 2010, the new PMG announced his four core strategies for the Postal Service: 1.Strengthening the business-to-consumer channel. 2.Improving the customer experience. 3.Competing for package business. 4.Becoming a leaner, faster, and smarter organization. It is a daunting task for any organization to implement new strategies. We have established an Audit Project Page to provide another opportunity for our stakeholders to comment on this issue. Click here to review – Postal Service Core Strategy Linkage. We are interested in hearing your views on the four core strategies. What is needed to ensure the success of these strategies and what outcomes do you believe the core strategies are intended to achieve? This topic is hosted by the OIG’s Planning and Strategic Studies Directorate.
  • on Jun 27th, 2011 in Mail Processing & Transportation | 5 comments
    The U.S. Postal Service has experienced a significant decline in mail volume in recent years, yet its contracted surface transportation remains largely unchanged. While mail volume dropped almost 16 percent from fiscal year 2008 to 2010, the Postal Service contracted out around 1 percent more miles of highway transportation over the same period. During the same time, the Postal Service has had considerable success minimizing the number of labor hours employees spend on mail processing. The following factors may have mitigated the effects on transportation from a volume drop: • Network Distribution Center restructuring. • Postal Service efforts to move more mail from air to surface transportation. • Postal Service efforts to sell the newly empty space to other shippers through a collaborative logistics program. Transportation represents the second largest cost component for mail delivery after labor, but the Postal Service has substantially more authority to cut contracted miles. The Postal Service could use its greater flexibility to end unnecessary contracts, alter necessary contracts, or redesign the system altogether. Highway transportation provides a strong opportunity for cost savings. What do you think of the current contracted surface transportation infrastructure? How would you adjust to new mail volumes? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Jun 20th, 2011 in Pricing & Rates | 7 comments
    Offering volume incentives is a common business practice in the U.S. and around the world. Although the U.S. Postal Service offers incentives to businesses that presort their mail, the agency does not offer incentives based strictly on the volume of packages shipped. One reason might be that offering volume incentives would lower the profit margin on each package shipped; yet, the potential volume increase of items shipped would make up for the smaller profit margins. E-retail is a multibillion-dollar industry through which millions of transactions are made via clearinghouses, such as Amazon.com and eBay. The e-retail industry continues to grow and includes on-line sales in virtually every industry. In the U.S., online retail spending for the Q4 2010 reached a record $43.4 billion, up from $39.0 billion in Q4 2009. This accelerated growth rate represented the fifth consecutive quarter of positive year-over-year growth and second quarter of double-digit growth rates in the past year. This trend will likely continue as more online people turn to the internet for their shopping needs, and younger, digital-savvy generations increasingly flex their spending power. Companies like eBay, Amazon.com, and traditional retailers with strong web operations should continue to benefit from this growth. Increases in e-shopping means an increase in the quantity of goods shipped is also increasing. Most vendors have their preferences, which are frequently based on cost. Should the Postal Service take advantage of the increased amount of shipping generated by e-retailers by offering incentives? Yes or no, and why? This blog is hosted by the Office of Audit’s Financial Reporting Directorate.

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