• on Nov 9th, 2009 in Delivery & Collection | 65 comments
    News about disappearing collection boxes is everywhere these days. Even BBC News ran a story on the decline of the blue collection box in the United States.

    The Postal Service argues that picking up mail from collection boxes is expensive. Removing underused boxes is a cost savings move and a reasonable response to the economic crisis. The Postal Service is removing boxes with less than 25 stamped mail pieces per day.

    Critics wonder if there is adequate analysis to support the 25-piece minimum and whether one reason for removing collection boxes — in addition to the minimal cost savings — is that the Postal Service does not want to be criticized for poor service. Fewer boxes mean fewer opportunities to miss a collection or to pick up mail too early.

    Is the Postal Service thinking too narrowly and missing some of the value of collection boxes? The ubiquitous presence of the boxes is free advertising for the ailing agency. How much would a private sector company pay to be allowed to put a collection box anywhere it wanted to in the country? Millions? Billions?

    What do you think? Is removing collection boxes a reasonable cost-cutting move or a strategic mistake that the Postal Service will later regret?

    This topic is hosted by the OIG's Risk Analysis Research Center (RARC).

  • on Oct 31st, 2009 in Delivery & Collection | 65 comments

    In these challenging times, reducing the cost of delivery operations — one of the Postal Service’s largest expenses — could save millions. One option the Postal Service is considering is to discontinue Saturday city and rural delivery and collection services.

    Saturday is said to be one of the lowest mail volume days. It’s also a day when many businesses are closed. The September/October 2009 digital issue of Mailing Systems Technology included a survey of managers working in the mailing industry. Of those surveyed, 98 percent said changing to 5-day delivery would not require a change in staffing. The survey results also indicated that most managers surveyed (81 percent) preferred Saturday as the day of the week that the Postal Service would stop delivering mail. An additional 62 percent of the managers surveyed felt that once implemented, there should be no exceptions to 5-day deliveries such as for holiday weeks or high-volume mailing periods.

    Gallup also conducted polls on ways to help the Postal Service solve its financial problems. They found that 66 percent of Americans supported reducing mail delivery days from 6 to 5 days, and 66 percent also supported reducing the number of days the Post Office is open from 6 to 5 days.

    The Postal Service is currently studying the reduction of mail delivery from 6 days to 5 days. Should the Postal Service consider eliminating delivery, collections, retail, and remittance services only for delivery units with low mail volume? Should the Postal Service eliminate these services for all delivery units nationwide?

    This blog is hosted by the OIG's Delivery directorate.

  • on Oct 26th, 2009 in Delivery & Collection | 27 comments
    Providing mail delivery is central to the Postal Service’s mission.  Delivery is the Postal Service’s largest operational function and accounted for approximately one-third of its nearly $78 billion in total expenses during 2008.  Postal Service management is working hard to reduce delivery costs while continuing to deliver to 149 million[1] addresses in the most efficient manner possible.  Despite declining mail volumes, the Postal Service is challenged to provide cost efficient and effective service to a delivery network growing by more than 1 million addresses each year. The mode of delivery plays an important role in determining the cost and efficiency of delivery.  The Postal Service provides three modes of delivery for existing delivery points — to the door, to a mailbox on the curb, and to a centralized point that serves several addresses.  Door-to-door delivery is the most costly mode and is no longer available for new delivery points.  When new developments are established, curbside and centralized deliveries are the only options.  Since centralized delivery is the cheapest mode, the Postal Service favors installing centralized delivery.  However, the decision on mode of delivery is sometimes left to the developer. Curbside delivery is the most widely-used mode of delivery for residential delivery points.  As of September 1, 2009, there were 49 million curbside delivery points.  The second most utilized mode of residential delivery is “other” which includes door-to-door.  Table 1 below shows the total number of possible residential deliveries by delivery mode. Delivery Table 1 For business delivery points, the “other” mode of delivery, which includes door-to-door, is the most utilized mode with 5 million delivery points as of September 1, 2009.  Table 2 below shows the total number of possible business deliveries by delivery mode. In response to decreasing mail volumes and revenues, the Postal Service needs to make every effort possible to decrease the cost of delivery operations.  Although the Postal Service’s goal is to maximize the use of centralized delivery with the developer’s input, this is not always possible.  Additionally, existing costly delivery points could be converted to more cost effective modes. Delivery Table 2 What do you think? Is the Postal Service making every effort to promote centralized delivery in new developments and convert existing costly door-to-door and curbside deliveries?

    [1] This number includes delivery to all residential, business, and Post Office box addresses. This topic is hosted by the OIG's Delivery directorate.

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