• on Jan 19th, 2015 in Finances: Cost & Revenue | 36 comments

    For the first time in years, the U.S. Postal Service has money to invest in its future. Postal officials have said they expect to spend about $2 billion on capital projects in 2015.

    There’s a good chance most of that investment will go toward revamping the 190,000-vehicle fleet – one of the Postal Service’s most pressing needs. Our audit work found that the Postal Service’s vehicle fleet is adequate for delivery needs only until about 2017.

    Another area overdue for investment is facility maintenance and improvements. An earlier audit report found that budget constraints have hindered the Postal Service’s ability to fund facility repairs and alterations. About half of its incomplete repairs in fiscal years 2011 and 2012 were potential safety and security problems, our report noted.

    While $2 billion is a nice chunk of change, it’s a relatively small capital investment for a $68 billion organization. Still, the Postal Service has had so little available money for capital projects over the past few years that $2 billion seems like a bonanza.

    So this week, we are asking you to weigh in with your suggestions on how the Postal Service should invest its $2 billion. Should vehicle fleet replacement be the number one priority? Or facilities? Where else is capital investment needed? What else would be on your wish list if extra funds were available? 

  • on Jan 12th, 2015 in Labor | 7 comments

    A business is only as good as its employees, which is why more and more organizations are offering flexible workforce policies to attract and retain the best workers. Among other things, flexible workforce policies help employees adjust their work schedules to the needs and circumstances of their personal lives, so they can have a healthier work-life balance. The idea is that happier employees are more committed and productive employees, and that leads to better customer service.

    We endorse the win-win idea behind workforce flexibility in our new white paper, Flexibility at Work: Human Resource Strategies to Help the Postal Service. We believe the U.S. Postal Service could do better at recruiting and retaining high-quality employees if it started offering flexible workforce policies. As it is, there’s relatively little flexibility in postal work schedules, making it very hard to accommodate an emergency or even a pressing situation facing a worker – for instance, kids that need to be picked up at a certain time every day or elderly parents that need to be driven to a regular medical appointment each week.

    Properly implemented policies offering things like job-sharing, compressed work weeks, shift-trades, and self-scheduling are proving effective in other industries, as numerous businesses are finding they have a stronger labor force as a result of the flexibility. We don’t say which specific policies the Postal Service should implement. Rather, we present four high-level principles to consider when developing flexible workforce policies: create a partnership for flexibility between labor and management; evaluate a portfolio of initiatives; develop more detailed information on the expected or anticipated daily workload; and seek continuous feedback from employees.

    What do you think? Are flexible workforce policies a good thing for any business? Are the suggested flexibilities realistic in a service-based business like the Postal Service? What flexibility policies would you like to see in your workplace? 

  • on Jan 5th, 2015 in OIG | 17 comments

    The year 2014 was certainly historic on the postal and logistics front. Alibaba entered the U.S. market with a bang, setting a record with the largest ever U.S. initial public offering. For the first time ever, non-mail revenues exceeded mail revenues for postal administrations around the world. Shippers braced for the full effect of dimensional weight pricing. And the U.S. Postal Service added its name to the growing list of agencies and companies to suffer a data breach.

    All in all, quite an eventful year. OIG staff sifted through the news and put together a top 10 list of postal stories, in reverse order of impact. Share your thoughts and take our poll to vote for your top story.

    10. Staples Taps Out – Under pressure from labor groups, Staples and the Postal Service ended a pilot program to set up mini-post offices in stores. Instead, the 82 Staples pilot locations transitioned into the Postal Service’s long-established Approved Shipper Program, which offers some postal products alongside those of other carriers.

    9. Open Sesame! – China’s biggest e-commerce company Alibaba set a record for the largest U.S. initial public offering ever, raising $25 billion. Alibaba’s CEO said the company plans “aggressive expansion” in the U.S. With any luck, the Postal Service will figure out how to partner with Alibaba too.

    8. Dim Weighting on Shippers – FedEx and UPS announced plans to price all ground parcels based on how much space they take up during transport, a concept known as dimensional weight, or dim weight, pricing. Analysts predict this change will result in the most dramatic rate-spike for shippers in decades. Meanwhile, the Postal Service bucked the trend and lowered most commercial Priority Mail prices in 2014, a move aimed at gaining commercial customers.

    7. A Capital Idea – For the first time in years, the Postal Service has funds to invest in capital projects. Helped by the exigent price increase in January 2014, the Postal Service ended the fiscal year with $1.4 billion in “controllable” income and said it has about $2 billion for capital investment.  

    6. Postal Banking Gets Fresh Look – A raft of media coverage of an OIG paper on postal financial services energizes a lively public policy debate, including a slew of conferences, and puts the idea of postal banking on the menu of possible reforms.

    5. Invasion of the Last Mile – Last mile delivery has gotten crowded with retail giants, such as Walmart and Nordstrom, trying their hands at same-day delivery and/or experimenting with crowdshipping. And smaller players are providing niche delivery services, such as Peapod for grocery delivery or Deliv that shuttles goods from shopping malls to customers.

    4. Amazon Eyes World Domination – The giant e-commerce provider is moving into all aspects of the supply chain and beyond, opening warehouses and distribution centers, offering same-day delivery, testing drones, using bikes, providing cloud services, and after-sales support services. Amazon is also a valuable partner of the Postal Service, collaborating on Sunday delivery and the new grocery delivery test.

    3. New Champion of the World – Non-mail revenues now exceed mail revenues for postal organizations around the world, according to Accenture’s annual report on high-performing posts. This shift indicates how important parcels and other diversified products - representing 52 percent of posts' total revenues - have become to posts.

    2. Madame Postmaster General – Postal Service Chief Operating Officer Megan Brennan is named to succeed retiring Postmaster General Patrick Donahoe. Brennan will be the first female PMG in the Postal Service’s 240-year history.

    1. Hack Attack – The Postal Service joins the growing list of government agencies and corporations to experience a data breach and the repercussions that come with it, including a congressional hearing, customer and employee concern, and some corporate soul-searching. There were almost 61,000 cyber attacks and security breaches across the entire federal government last year, according to a recent White House report. 

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