Seems Americans have caught the travel bug. Maybe it’s because there is more disposable income in a post-recession America, or a more global economy requires more international business travel. Whatever the reason, one result is that passports are a hot commodity these days. The U.S. Department of State says it issued well over a million more passports in fiscal year (FY) 2014 than in FY 2011.
That’s also a mini-boon to the U.S. Postal Service, which accepted 5.2 million passport applications in FY 2014 alone, earning $129.4 million in revenue. And the Postal Service has been taking steps that could enhance that profit center. Specifically, in 2013 it initiated a pilot designating five post offices as passport centers. Located in the Pacific Area, these facilities offer expanded service hours and staff dedicated to facilitating the passport acceptance process. (The Postal Service is authorized to accept passport applications on behalf of the State Department. It then sends the passports to the State Department for approval.)
The pilot is a success, with revenue at the centers increasing by 150 percent between FY 2013 and FY 2014. Management is planning to expand the effort in FY 2016.
In a recent audit we supported the idea of expanding passport centers and identified 181 post offices that have attributes in common with the five existing centers. They’re located near either a shopping center or a U.S. border, and their passport-related revenue is already growing, indicating strong demand for passport services in their respective areas.
In that same audit we found the Postal Service could raise even more revenue if it were to expand the number of facilities that offer passport photo service in conjunction with passport application processing. We estimated it would have generated an additional $19.1 million in FY 2014 if just under half (48.1 percent) of all passport applicants had paid for a photo. The Postal Service might also be able to increase revenue by making the price of its photo services more competitive. Currently, it charges $15, which is as much as 47 percent higher than competitors’ fees.
Have you used the Postal Service to get a new or renewed passport? If so, tell us about your experience. Would you be more likely to use the Postal Service for passport photos if the price were lower? What other government services are a good fit for the Post Office network?