• 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? 

  • on Feb 23rd, 2015 in Strategy & Public Policy | 23 comments

    Don’t let the decline in mail volumes over the past few years fool you. People still place a high value on postal services. Postal customers especially value being able to interact with postal employees at a Post Office as compared to other retail alternatives. And while some people might be indifferent to Saturday delivery of letters, they still value Saturday delivery for packages.

    These discoveries are among the key findings in our first-in-the-U.S quantitative survey on the value people place on the services the U.S. Postal Service provides as part of its universal service obligation (USO). In our earlier report on the USO, which looked at the collection of requirements that ensure all users of postal services receive a minimum level of service, we pointed out the need for a quantitative study – one that asks people if a higher level of service is valued enough to warrant the additional cost. We recently conducted such a study, What Postal Services Do People Value the Most?, with market research firm Gallup and postal economist Michael Bradley.

    The new study asked respondents to consider four aspects of the USO:

    • Mode of delivery;
    • Access to postal services;
    • Frequency of delivery; and
    • Price.

    We learned household customers place a high value on getting mail delivered to their door or to a curbside box rather than to cluster boxes or parcel lockers. Even for parcels, household consumers don’t like cluster box or parcel locker delivery, our survey found. At the highest parcel price in the survey, more than half of consumers would prefer paying the higher price to have delivery to the door, suggesting convenience trumps other factors for customers.

    And it turns out that people really like to go to the Post Office. Both households and businesses have a strong preference for visiting post offices for retail services over alternative access points, including kiosks. However, respondents were satisfied with keeping post offices open for just a few hours, and placed minimal value on normal business hours.

    Yet for all services, respondents indicated a limit to the amount of postage they would pay as a trade-off for higher levels of service. It seems both household and business customers value lower prices and might be willing to accept lower levels of service to keep prices from rising sharply.

    We welcome your input on our survey results. What aspects of the USO are most important to you? What levels of service do you feel the Postal Service should continue to provide? 

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