• on Feb 7th, 2011 in Ideas Worth Exploring | 3 comments
    [dropcap style="font-size: 60px; color: #9b9b9b;"] I [/dropcap]n recent years, a growing number of people have chosen to avoid crowded shopping malls by doing their holiday shopping online. To a certain extent, online shopping reduces their carbon footprint by keeping these individuals from driving to and from the store. However, their packages still have to be delivered. What if postal customers could choose to have carbon neutral delivery for an extra fee? In 2009, Itella, Finland’s postal service, introduced a program where customers could pay extra for carbon neutral delivery, adding the “Itella Green” marking to letters for less than a penny or parcels for around five cents. Itella achieved carbon neutrality through a combination of energy efficient delivery vehicles by funding reputable, environmentally-friendly projects. While Itella’s plans include increasing carbon efficiency in all three phases of the package delivery process: sorting, transportation, and delivery, the greatest carbon efficiency gains currently come from their shift to electric or fuel efficient delivery vehicles. On February 1 Itella made the cost of carbon neutrality a standard part of all postage, making it the first country to offer completely carbon neutral delivery. That way, when a customer uses Itella to send a letter, package, or direct mail, they know they are getting zero net emissions. Through their efforts, Itella has made carbon neutral delivery, a key element in developing a “green” reputation and an advantage in competitive areas like package delivery. Is offering carbon neutral delivery as a separate, specialized service that customers can purchase an idea worth exploring for the Postal Service? The Postal Service is already in the process of converting its delivery fleet to cleaner electric vehicles, making carbon neutrality easier to achieve in the coming years. Moreover, does it make sense to give consumers a choice in terms of the environmental friendliness of their mail delivery? Sources: Hellmail Itella This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
  • on Jan 31st, 2011 in Finances: Cost & Revenue | 75 comments
    In 1916, the Federal Employees’ Compensation Act (FECA) was enacted. FECA provides medical, compensation, death, and other benefits, such as vocational rehabilitation, and nursing services to federal employees who sustain injuries, including occupational diseases, as a result of their employment. All Postal Service employees are covered by FECA. The Department of Labor (DOL) administers FECA and makes all decisions regarding the eligibility of injured workers’ to receive workers’ compensation benefits. DOL provides direct compensation to medical providers, claimants, and beneficiaries. The Postal Service reimburses DOL for all workers’ compensation claims in addition to paying an administrative fee. In fiscal year 2009, the Postal Service workers’ compensation expense was approximately $2.2 billion, an 81 percent increase from $1.2 billion in FY 2008. These costs include $55 million in DOL administrative fees for FY 2009. About 72 percent ($718 million) was a non-cash charge related to changes in the estimated discount and inflation rates used to calculate the liability for future payments. At the end of FY 2009, the Postal Service estimated the total liability for future workers’ compensation cost was over $10 billion. One of the contributing factors to the high cost of workers’ compensation payments is that FECA does not mandate a cut-off age for workers’ compensation benefits. Thus, injured workers can continue to receive workers’ compensation benefits well past the legal retirement age of 65, and in some cases employees over the age of 90 are still receiving workers’ compensation benefits. Fraudulent workers’ compensation claims also result in higher overall costs. To combat workers’ compensation fraud the OIG launched its crime prevention and awareness campaign in September 2009 and a joint year-long initiative with the U.S. Postal Inspection Service in February 2010. The successful investigative efforts saved the Postal Service more than $400 million for fiscal years 2009 and 2010 combined. What can the Postal Service do to reduce workers’ compensation costs? This topic is hosted by the OIG’s Human Resources and Security Audit Team.
  • on Jan 24th, 2011 in Mail Processing & Transportation | 27 comments
    The Postal Service established International Service Centers (ISCs) in 1996 to become more competitive in the international mail market. ISCs distribute and dispatch both incoming and outgoing international mail. The ISC network has facilities located in five major cities: New York, Miami, Chicago, Los Angeles, and San Francisco. The Postal Service hoped that ISCs would improve service and provide the structure needed to support new products and increase revenue. However, International Mail volume has not increased as projected by the ISC marketing and sales plan. During the period FY 2007 to FY 2010, International mail volume declined by approximately 29 percent (from 858 million to 609 million mailpieces). Although the Postal Service reduced expenses by nearly $6 billion in fiscal year (FY) 2009 and by almost $789 million during the first three quarters of FY 2010, the reductions have not been sufficient to offset declines in mail volume revenue. Consequently, the Postal Service is reviewing its mail processing and retail networks to remove duplication and make them more efficient to reflect current mail volumes. In light of international mail volume declines and the Postal Service’s current financial condition, does the Postal Service still need a separate network to handle international mail? Are there other options the Postal Service could pursue to increase International mail volumes and revenue? Please share your comment(s) on how to make the ISC network more profitable, effective, efficient and economical. This topic is hosted by the OIG’s Network Processing Audit Team.

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