Public policy debates about solving the Postal Service’s financial crisis have largely focused on reducing costs by cutting service such as Saturday delivery, transitioning from brick and mortar post offices to alternative retail sales channels, or limiting other functions performed by the Postal Service. There has been less talk about the costs of meeting delivery service standards, which were reviewed following the passage of the Postal Accountability and Enhancement Act of 2006.

Can the Postal Service relax some of its requirements to save money in transportation or processing costs? Right now, its goals are to deliver First-Class Mail in 1 to 3 days and Standard Mail in 3 to 10 days. A slight adjustment of these standards in particular areas might make it possible to save a great deal of costs. Instead of developing the goal first and trying to reach those levels, no matter how costly it is, maybe the Postal Service should closely analyze its infrastructure and develop goals that allow for reaching the greatest efficiencies.

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For example, if the service standards for bulk mail from Chicago to Los Angeles were given an additional day the Postal Service could avoid the expense of trucks and instead utilize economical rail transportation. A First-Class Mail package that currently travels by air could be carried by truck if given another day.

By relaxing service standards, the Postal Service can move further towards a hub and spoke network, which could result in substantial savings. Currently, plants may have lots of half-empty, smaller trucks fanning out to a multiplicity of plants only once or twice a day. Under this new strategy, many trucks would go to a mail consolidation facility, which consolidates the mail and ships it on larger, fuller trucks to the destination facilities throughout the day. This design has the additional benefits of network stability and is capable of scaling up or down with changing mail volume.

The bottom line is that the Postal Service and its stakeholders need to decide what service standards are worth the cost. The Postal Service should have an honest and informed discussion about the cost savings that it can pass on to the public by relaxing some of the present delivery service standards.

Do you think the Postal Service should adjust its delivery standards to cut its costs?

This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

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  • anon

    I can understand why the postal service is having a hard time…it’s because THEY are apathetic, do not accept responsibility, are not accountable to anyone and lazy. Out of the last 60 packages (correctly address, correctly packed, correctly zip coded+4, there have been 32 problems (ranging from the parcels just disappear, to items damaged so bad that refunds have to be made to customers…oh the postal service does not return the items they damage even when tracking has been bought, to items delivered to an address NOT listed as the address of the recipient, to first class mail sitting in a sort center for three weeks before it moves to the next post office or sort center, to packages left on a doorstep in the pouring rain, to not updating tracking information. Once leaving my LOCAL poet office and going to the next destination, this is where the problems occur (between the next destination and the recipient). How poor can service get? Looking at my tracking and business issues with the post office, I guess they can get worse than the 50% fail rate they currently have with my business. I get emails back (no one will call and speak to me personally), weeks after a compalint form is filed AND, I get back the robotic form letter that the post office is not responsible (WHAT???, not responsible for their own service or the services people pay for?). I think the postal service needs to be privatized, taken out of government hands as the government is not doing a good job policing one of their won departments. Let’s see if this gets posted…probably not as theur want to keep the public in the dark as to how bad it is. If you are mailing an occasional letter, bill or parcel; there is a chance that you do not mail enought to see this. If you are a big biz then your bad service is reduced by the huge amount you mail…for the samll business person, the post office is deadly. I would use FEDEX, but the cost is way to high for me to beable to make a living. Privatize the postal service and run it like a corportation that fires people who cannot do their jobs correctly.

    Jan 25, 2013
  • anon

    It really makes me mad to come home and find the postal service truck has driven in my yard and muddied my sidewalk, he needs to park the truck and get his lazy behind out and walk up to the mailbox. This is in Bellevue Ne and it doesn't do any good to complain to the post master I've gone down that road before, the general response from him is well, we're all human and make mistakes. Well I have news for him, I don't get paid over 20 bucks an hour to drive through peoples yards, It's a matter of walking 2 to 3 feet.

    Nov 22, 2013


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