• on Dec 8th, 2014 in Mail Processing & Transportation | 7 comments

    Turns out the U.S. Postal Service isn’t just about collecting and delivering mail. It also has an essential role in the middle. Sorting and long-haul transporting, that is.

    That may run counter to the arguments of those who believe the Postal Service could be more efficient if it focused only on collecting and delivering mail (also known as first mile and last mile) and let private companies take over sorting and long-distance transporting (the middle mile). The argument has gained traction among some stakeholders and observers, but our new white paper – The First and Last Mile Strategy: A Critical Assessment  – says the opposite may be true.

    With the Postal Service beset by financial challenges, anything that might improve efficiency and the bottom line merits consideration. But outsourcing mail processing would be a pretty radical measure, not to be taken lightly. That’s why we asked Dr. John Panzar, a noted expert in postal economics, to look at the economic implications of the Postal Service completely abandoning mail processing and focusing exclusively on collection and delivery. We asked him to look only at letters and flats because parcels constitute a different market.

    Dr. Panzar developed a theoretical model based on key economic principles and found that overall efficiency would likely decrease should private companies take over the middle mile. Mailing costs, in turn, would likely go up for postal customers. The only winners would be the companies sorting and transporting the mail, but their combined gains would be less than the losses to the Postal Service and customers. Simply put, the Postal Service’s participation in mail processing is necessary for overall efficiency.

    Like all theoretical models, Dr. Panzar’s relies heavily on particular assumptions that are open to challenge. Still, his intriguing conclusions invite thoughtful discussion and debate. So, what do you think? Should outsourcing the middle mile be studied further? Do Dr. Panzar’s findings surprise you? What other ways could the Postal Service gain efficiencies? 

  • on Dec 1st, 2014 in Products & Services | 3 comments

    The U.S. Postal Service’s 2014 Holiday Playbook has a very modern spin. More than just holiday timetables and stamps, it encourages readers to download the Postal Service’s augmented reality (AR) app, “USPS AR.” The app is available through the Google Play store and Apple App Store.

    AR allows users to scan physical objects and see them with digital graphics, information, and sounds through an app on a mobile device. AR works by connecting to a back-end library of images, allowing the app to “see” those objects and overlay the real-world images with computer-generated animations. Users must have an Internet connection to access the AR component. For example, in this year’s holiday campaign, the Postal Service added the eagle on the side of blue collection boxes to its library. When a mailbox is scanned, it will show a different animation each week followed by an opportunity to visit the Postal Service’s mobile site.

    This leads to one of the biggest challenges of AR – companies must be very clear about how to use the app. They need to indicate what users should scan and what additional functionality the app delivers. Some exasperated postal customers didn’t know what they were supposed to scan or how the app worked.

    Reviews on Google Play and the App Store suggest some users have had other troubles with the app as well. But a number of reviews have applauded the Postal Service for doing “something cool.” These positive reviewers have also expressed interest in seeing where the Postal Service takes this technology.

    The app is different from past Postal Service forays into AR because it could generate revenue by hosting other companies’ advertisements. Companies could create and implement campaigns using AR mailpieces and allow users to access digital content through the USPS AR app. This would let users download one app rather than a different app each time they want to scan something. If all mail goes through one platform, customers might be more likely to use it.

    Have you downloaded the USPS AR app? If so, do you like it? What do you wish it could scan? Do you see an opportunity for the Postal Service to generate revenue with AR? 

  • on Nov 24th, 2014 in Products & Services | 19 comments

    It’s been more than 3 years since the U.S. Postal Service changed its rules on postage stamps, ending its long-standing tradition that people on stamps had to be deceased. At the time of the announcement, the Postal Service said it would consider stamps for acclaimed American musicians, sports stars, writers, artists, and other nationally known figures.

    The policy change led some people to worry that stamps were becoming advertisements, not carefully considered subjects of cultural relevance. Others worried that honoring a living legend could backfire. What if that person went on to do something embarrassing or, worse, illegal later in life? That’s no small concern as recent headlines from the sports pages suggest.

    Yet, 3 years on, none of the major stamp releases have featured any living “celebrities,” unless you consider the fictional character of Harry Potter to be a celebrity. (While the stamps featured the actors from the movie, the stamp honored the films, not the actors.) That release stirred up a good deal of controversy – and publicity – primarily because many philatelists felt it commercialized the stamp program. And, they noted, Harry Potter isn’t even American. Others, however, applauded the move as an attempt to make stamps relevant to a younger generation.

    The large response to our blog on the topic got us wondering: Who would you like to see on a stamp? Would you send more mail if you could buy stamps honoring Bruce Springsteen, Justin Bieber, Michael Jordan, or Julia Roberts? Do you think living celebrities should be allowed? Yes, but with certain criteria? Is it important to you that the featured individual be American?

    You can find out more about the Postal Service’s stamp program by visiting http://uspsstamps.com/ 

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