• on Mar 14th, 2011 in Strategy & Public Policy | 13 comments
    How can the Postal Service solve its financial problems? What is the future role of the Postal Service at a time when digital alternatives are replacing many of the functions of hard copy mail? These are the questions facing policymakers and the postal community. Sometimes the best way to answer serious questions is to ask even more questions. A deeper look at foundational issues can provide valuable guidance for reaching the right decisions. Last month, the OIG issued a white paper Fundamental Questions for the Future of the Postal Service. In the paper, we pose eight questions that we think are fundamental for determining the role of the Postal Service in the 21st century: 1. What is the nation’s essential need for the Postal Service in the 21st century? 2. Is a profit-driven business or a national infrastructure best suited to carry out the Postal Service’s mission? 3. How should the nation’s Postal Service be financed? 4. What is the proper governance model for the Postal Service? 5. What does the universal service obligation mean? 6. Does monopoly-financed universal service assist or harm the Postal Service? 7. Should the Postal Service be allowed to expand into nonpostal services to supplement monopoly shortfall? 8. Should the Postal Service have additional social responsibilities beyond its core mission? We are raising these questions not to provide answers but to spur discussion. We want to hear your views. What do you think the right answers are? Have we left any fundamental questions out? This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Mar 7th, 2011 in Mail Processing & Transportation | 3 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] E [/dropcap]very day, thousands of containers holding letters and large envelopes are flown across the country to meet Postal Service standards. As you might expect, in almost every case, it costs more to fly mail than to ship it on a truck or by train. Because of this, from a cost standpoint, it’s important that each mail container is filled to capacity. While conducting prior audits on other issues, we observed that large mail processing facilities were running multiple processing machines – even with declining mail volume. Running one machine full time to process mail results in full mail trays and tubs, while running multiple machines to process the same amount of mail results in multiple partially-filled trays and tubs. Running multiple machines may be efficient for processing facilities, but it results in transportation inefficiencies and increases costs. When you consider that it costs the Postal Service about a $1 per pound to fly mail, the cost of flying partially loaded mail trays and tubs could be substantial. In our current audit, we plan to look at information related to the density of First Class Mail on air transportation and assess the related costs, and we’d like your views. What do you think? How can the Postal Service make sure only full containers fly? One option might be to identify mail needing air transportation and process it separately from other mail? Is that a good option or would you recommend other methods? The Office of Audit Transportation team is hosting this topic.
  • on Feb 24th, 2011 in Ideas Worth Exploring | 5 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] H [/dropcap]ow has the digital age changed your life? Do you still shop in a store or buy online? Get the newspaper delivered or have an online subscription? Read hard copy books or use an e-reader? If you chose the digital options, you are not alone. You may be a digital native, one of those who are most comfortable working in a digital environment. The Internet and the digital economy are fundamentally changing communications, transportation, and commerce. This “digital revolution,” in combination with the great recession of 2008 to 2009 has affected postal operators all over the world causing a steep decline in the volumes of personal, business, and advertising mail. This shift from the physical will only accelerate as digital natives become more prominent in the workforce. In a white paper released today, the Office of Inspector General analyzed the changing digital landscape as the first in a series of papers on the Postal Service role in the digital age; here is a sample of the key trends: 1.There is a progressive shift from the physical to the digital by business, government, and consumers. 2.Control has shifted from the sender to the receiver. 3.The Internet has evolved from mass broadcast media to personalized conversations. 4.Explosive growth of mobile devices increases consumption of content “on the go”. 5.E-commerce is growing rapidly but has not reached its full potential. 6.Mobile commerce is positioned to grow significantly in the U.S. market. 7.Digital technologies have facilitated global commerce. Though there has been a rapid shift of communications and commerce from the physical world to the digital, there are shortcomings and fundamental gaps that prevent all U.S. consumers from migrating into the digital world. They include: •The Internet and all of its functionality is not available to all citizens to reap its economic benefits. There is a lengthening tail of digital refugees, which will only increase as the digital revolution progresses; •There is a potential threat to the principle of “network neutrality,” nondiscrimination in access to communications networks; •There is still a lack of an adequate level of privacy, confidentiality, dependability, and security in digital communications and transactions as desired by citizens, with the potential of involuntary profiling of consumers; •The digital infrastructure has limitations in connectivity and bandwidth, provided by companies that could go out of business at any time; •There are inadequate personal information management tools to effectively deal with the increasing volume of electronic communications and applications; •There is still insufficient availability of affordable digital currency and secure and convenient financial tools to transact online; and •There are limits of choice, even withdrawal of the physical option as companies push consumers into digital-only communications. Given the Postal Service’s role as a trusted intermediary in the physical world, what role do you believe it should take in digital world, if any? Give your comments below. To learn more, click here to read the paper. [retweet] This topic is hosted by the [tooltip text="The Risk Analysis Research Center (RARC) conducts research on economic, business, and policy issues related to the Postal Service. RARC's staff includes experts in economics, operations research, and data analysis."] OIG’s Risk Analysis Research Center (RARC). [/tooltip]

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