• on Mar 16th, 2015 in Mail Processing & Transportation | 1 comment

    This is the second blog in our two-part series on sustainability. Last week’s blog, Green Scene, focused on recycling efforts.

    When do growth and reduction go hand-in-hand? When the world’s posts are trying to grow their business but reduce their carbon footprint.

    The 25 national postal operators that make up the International Post Corporation (IPC) have made great strides toward achieving their carbon dioxide emission reduction goals, but they hit a bump in 2013 and 2014. A coalition of the world’s industrialized posts, the IPC is aiming to cut carbon dioxide emissions by 20 percent by 2020. Half of the IPC members have already reached the target. But last year marked the first increase in emissions from the use of heating and transport fuel for the group as a whole since the IPC environmental measurement program began in 2009.

    One reason for the backsliding is actually a good problem. The global growth in e-commerce, which has boosted the posts’ number of parcel deliveries, is making emission reduction targets more challenging. Especially harsh winters in some countries and a big increase in size in one of the operator’s delivery networks have also contributed to the posts’ higher fuel consumption.

    IPC officials are stressing the importance of switching to renewable energy, either self-generated or purchased, wherever possible.

    The U.S. Postal Service is one of the 25 posts taking part in the IPC Environmental Measurement and Monitoring Program. It’s also one of the posts that saw its transportation fuel use increase. In its 2014 Sustainability Report, the Postal Service notes that “an aging [postal vehicle] fleet and the need to service more delivery points are pushing our fuel demand upward.” Still, the Postal Service must continue its efforts to manage its fuel resources as efficiently as possible, for both its own fleet and its contracting vehicles. (Our 2014 audit report offered recommendations on encouraging fuel efficient practices in highway contract routes.) This should get easier in the next couple of years as the Postal Service replaces its long-life vehicle fleet. This summer the Postal Service will select vendors to build new vehicle prototypes and it will award a contract of up to $6.3 billion over several years beginning in 2017.

    With continued parcel growth expected, how can the world’s posts meet the demands of customers while reducing their carbon footprints? What technologies might benefit the Postal Service specifically? 

  • on Mar 9th, 2015 in Strategy & Public Policy | 0 comments

    It’s safe to say that sustainability has gone mainstream. It’s not just that “going green” is the responsible thing to do; it’s also good business.

    Take a look at Walmart’s website, or do a quick search on “corporate sustainability” and you’ll find another dozen or more well-known brands touting environmental sustainability is essential to doing business responsibly and successfully.

    The U.S. Postal Service, too, is trying to do its part, particularly with recycling. Since 2008, the Postal Service has recycled an average of about 220,000 tons of wastepaper, cardboard, cans, plastics, and other reusable materials. In fiscal year (FY) 2013, the Postal Service diverted about 40 percent of its solid waste to recycling, and the target is to divert 50 percent by the end of this fiscal year. The Postal Service also created the USPS BlueEarth federal recycling program to make it easy for federal agencies to recycle inkjet cartridges and unwanted electronic devices. Federal agencies simply send eligible items through the mail at no charge to a certified recycler that cleans data from the devices. A similar service is offered to Postal Service customers through the Return For Good program, which allows you to recycle eligible small electronics through participating third-party vendors and even get cash back for certain items.

    For business mailers, the Postal Service recently launched Secure Destruction, an optional service that lets First-Class Mail customers direct postal employees to shred and trash their undeliverable First Class letters rather than return them.

    Still, sustainability practices are constantly evolving and there’s always more to do. Indeed, our audit work identified some immediate opportunities for the Postal Service to increase recycling revenue by improving collection methods and recycling plastics.

    We welcome your input. What more could the Postal Service do around sustainability programs? What programs should it consider for individual customers? For business customers? For suppliers?

    Next week, our blog will look at the progress the Postal Service and other posts have made toward achieving their goal of cutting carbon dioxide emissions 20 percent by 2020. 

  • on Mar 2nd, 2015 in Mail Processing & Transportation | 5 comments

    If you’re a shipper, you may have noticed your fuel surcharge fees aren’t going down in step with the declining price of oil. That’s because both FedEx and UPS tie their fuel surcharges to the price of diesel, which hasn’t dropped as far or as fast as gasoline prices. Furthermore, both shipping giants recently adjusted how they calculate fuel surcharges, resulting in surcharges that won’t drop as much as they would have under the previous calculation. In some cases, fuel surcharges are even going up.

    Fuel surcharges are common in the transport industry, from taxis and airlines to moving and delivery companies. Many of these industries instituted fuel surcharges to smooth out costs when fuel prices were skyrocketing. But in times of low fuel prices, like now, customers see these surcharges as a blatant money-grab.

    Right about now, you may be noting the U.S. Postal Service doesn’t have a fuel surcharge. It also didn’t go all in on dimensional weight pricing (See our previous blog). And it’s not likely to chase the next big thing in pricing: “surge” or “peak” pricing. For the 2015 holiday season, UPS said it plans to follow the Uber model and hit shippers with “peak” prices on its busiest days. This comes after UPS said it experienced higher-than-anticipated 2014 peak season expenses. FedEx is expected to follow suit. For consumers, this could mean the end of free shipping, at least on last-minute orders around the holidays.

    So, the Postal Service might look even more attractive these days with its relatively straightforward, consistent pricing. Of course, the Postal Service isn’t a public company, so it’s not under the same pressure to deliver profits as UPS and FedEx are. But customers are not too interested in the whys and wherefores – they just want low-priced, reliable, fast delivery.

    Do you think the Postal Service is well-positioned to lure away commercial package business from FedEx and UPS? Does the lack of a fuel surcharge put the Postal Service at any kind of a competitive disadvantage? Or is it only advantageous? Do you see the Uber surge or peak pricing model getting a foothold in other industries? 

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