Background

Federal, state, and local governments use mailing and shipping services to help carry out their missions and meet their diverse mailing needs. Government mailers consider price, service, and contract terms when deciding between the U.S. Postal Service and one of its competitors; and some government entities use presorting to qualify for price discounts.

Our objective was to evaluate Postal Service opportunities to increase government mail revenue. We identified federal shipping challenges and opportunities in a 2013 audit report, specifically noting challenges related to price inflexibility and the lack of 2- and 3-day guaranteed express products.

What the OIG Found

The Postal Service has opportunities to increase revenue by enhancing its sales and marketing efforts to government mailers. Mailers we spoke with identified pricing, product, and service considerations that influenced them to use the Postal Service’s competitors, but we found that the Postal Service has opportunities to gain an advantage in the area of prices, products, and service performance; and could provide better value in certain instances, such as for products weighing less than one pound.

The Postal Service may also be able to capture revenue by promoting its mailing partners’ capabilities. For example, we found that 72 percent of federal agency mail was presorted. Mailing partners may be able to offer additional presorting services to lower the cost of government mailings. These partners could also offer more flexible payment options, such as paying after the service was provided. Factoring in mailing partners’ capabilities as part of Postal Service marketing efforts Highlights The Postal Service has opportunities to increase revenue by enhancing its sales and marketing efforts to government mailers. 1 Government Mail Report Number MS-MA-15-005 could be mutually beneficial: it could help the Postal Service retain government mail revenue and lower government mailers’ postage costs. 

What the OIG Recommended

We recommended the Postal Service enhance sales and marketing efforts toward governmental mailers. This could include more effectively promoting Postal Service prices, products, and service performance and promoting its mailing partners’ capabilities.