on Nov 29th, 2010 in Finances: Cost & Revenue | 8 comments
The sale of stamps and related products are a core Postal Service business. The Postal Service prints billions of commemorative and definitive stamps annually to enable customers to mail pre-paid domestic and international mail and to also encourage stamp collecting. Given the traditional importance of stamps to the Postal Service, it is vital that the process by which stamps are distributed to customers be both timely and secure. Stamp Distribution Centers (SDCs) issue stamps to thousands of Post Offices, postal stores, and contract stations (sites under contract to the Postal Service typically located in retail establishments) nationwide. Not only do the SDCs distribute all accountable stamp items (stamps, coils, envelopes, and postcards), but they also accept obsolete and redeemed stock for destruction. During fiscal year 2010, the Postal Service consolidated its existing stamp distribution network into six SDCs. The goal of this consolidation was to standardize and automate work processes, reduce space requirements, improve transportation, and reduce stamp destruction costs. This topic is hosted by the OIG's Field Financial-East audit team.


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The consolidation of stamp inventory has placed the burden of stamp inventory and the related costs onto the mailer. For a large volume mailer, it is often difficult to forecast stamp needs week to week let alone on a cycle that allows enough lead time for enough product on hand.

Trying to purchase stamps from the St. Louis Main Post office is a nightmare. While inventory is usually on hand, rules dictate that only the manager can access the secured stamp stoage area. If a mailer needs stamps when the manager is out (often in this case) you're just out of luck.

With the assistance of our BSN, I now must e-mail no fewer than 5 people of my stamp needs at least a day ahead to insure I have product avialable outside of secured storage for pickup. As an example, I attempted to order $45,000 in stamps (albeit the same day) last week. The person taking my request indicated that she doubted she had the inventory on hand. After prompting her to check, said she did, but wasn't able to pick them up again becase the keyholder was unavailable.

The new procedures for turning in waste postage has just added more time to an already over burdened process. Requiring a barcoded form prior to presenting waste stamps often requires a special trip to the post office several days prior to submitting the many trays of bundled in 50's waste stamps. There has to be a better way.

We have trouble ordering stamps because the retail operation is sometimes too busy to answer the phone. We have trouble finding out if stamps are available for purchase for the same reason. We usually have to make multiple calls to find out if the message was received & acted upon.

Credits for stamp destruction sometimes take 4-6 months. Then we get a call providing us the dollar amount detail on the half dozen or so stamp credits we have on hand. We then have to wait until the next time we purchase stamps to use the credit. If the manager is not in, nobody else can sell us the stamps because we are using a credit. Sometimes we have to make multiple calls to find out if stamps ordered under credits are ready and available for pickup.

We understand the chain of custody constraints within the USPS and access to the storage/sale of stamps. Once we do request stamps, sometimes it takes a long time for the local retail unit to get ordered stamps from the distribution center. Once it took 2 weeks to get stamps in because they are not Express Mail shipped from the distribution center & the first shipment got lost.

The stamp distribution network for which offices have to order stamps has become nothing short of a disaster since the consolidation. Since the consolidation, I have had one order shorted by a coil, an order that was acknowledged but never sent out, and another order that was shipped but never made it to my office. Keep in mind that I am at a level 11 office, so there is less to mess up with orders. I can only imagine the issues the larger offices are having.

The consolidation has also slowed down the time it takes to receive an order dramatically. When my district was sending out the stamps, I would receive them in an average of 2 days, now it takes about a week-although the last couple of orders have been coming in quicker. When it takes a week to receive an order, it makes ordering very difficult. You have to order enough to stay in stock until your following order comes in, and you also have to make sure you are under your accountability limit-a very fine line to walk. A lot of kinks that have to be worked out

Lobbies at the Post Offices were more impotrtant than conducting bussiness as usual. It was a concrete attachment between citizens and the govt. Philatelic stores and counters allowed people to see before they shopped and in rural aras, mistrust was over come because of relationships built over time between clerks and customers. This undoubtedly resulted in direct sales.

I love the commemorative stamps and from a small/average consumer perspective, I haven't noticed any impact from the recent changes with the SDCs.

The shift of ordering from the district to a consolidated site has not been a problem at all. The contrainsts mentioned by the other bloggers are the problems; not being able to order enough $$ amount for customers without receiving disciplinary action from higher level managers or not being able to issue stock to the unit to await customer pick up without going over "authorized" levels. If district staff have such a need to monitor individual offices, an application should be added to POS to add the customers name that made the large order and the expected date of pick up instead of Postmasters being harrassed and disciplined for being over an "authorized" limit or for ordering outside a regular cycle.

Consolidation is the key to saving the Postal Service. The success of the consolidation of the stamp distribution network should be used for other district jobs. For example; City carriers office percent to standard and street percent to base (both work productivity indicators for anyone not familar) are monitored at the Area Office (parts of the country) level employees--usually called Delivery Operations Staff. E-mails are sent by THOSE personnel to the district staff employees (individual state level) but also delivery operations--but by this time they have morphed from one into 3-4 and then forward to another manager who again fowards more e-mails with the same information BACK to the original office where the employees ACTUALLY work. (Have I confused you yet?) Funny thing is---the manager at the office where all this e-mailing and monitoring ends up had the information all along. Their computer and time-clock was the one that transmitted it to begin with. By the time this is over each and every office has received multiple spreadsheets and e-mails from numerous employees and departments. If consolidating stamp distribution saved money, I can only imagine the cost savings of consolidating spreadsheets and e-mails from delivery ops---at least in the Alabama District.

Thanks for taking the time to respond to our blog. All of the comments will be considered as we move forward with our audit work. Any feedback here is greatly appreciated by the audit team.