The Postal Service has “coupled” its retail and delivery operations, both managerially and physically, since delivery services were first established almost 150 years ago. Historical patterns, or the needs for delivery service efficiencies, primarily determined the location of physical facilities, which typically house both delivery and retail operations. Demands for postal retail services are changing both geographically and demographically as consumers age and population centers shift.
In a time when the Postal Service has suffered declines in volume and revenue across many categories, it has turned to the international market. For example, it has seized opportunities, including with China, to increase its overall market share in package and express business. But the Postal Service has to maintain an “international” infrastructure in order to efficiently receive and dispatch this mail flow.
Let’s take a simplistic view of the Postal Service by dividing it into two groups: Operations and Finance. Operations’ main concern is to make sure mail is delivered and other services are rendered to satisfy customers’ needs. On the other hand, Finance’s responsibility is to ensure that all the information stemming from the Operations side is captured for billing/payment and financial statement reporting purposes. After all, the Postal Service needs to be paid for their good work, doesn’t it?
Despite financial challenges resulting from declining mail volumes and current economic conditions, the Postal Service is continually driving efficiency by making better use of space, staffing, equipment, and transportation in processing mail. One key element of improving efficiency is consolidating mail processing operations, which is an ongoing effort.
Since fiscal year 2009, the Postal Service has completed 47 consolidations and has an additional 107 consolidations in progress for proposed savings of approximately $255 million.