December 11, 2013 (Report Number: DR-MA-14-001)

Strong customer demand for goods purchased over the Internet has driven growth in the package market. From fiscal years (FYs) 2010 to 2012, U.S. Postal Service package revenue increased by $1.4 billion and volume increased by 445 million mailpieces. The package volume increased in the first three quarters of FY 2013, compared to the same period last year. This growing package segment provides the Postal Service an opportunity to expand services and increase revenue.

The Postal Service has successfully managed package growth from a mail volume and workhour standpoint but has not tapped into the opportunities it has to improve readiness by implementing dynamic routing and modifying package compartments on cluster box units (CBUs). The dynamic routing tool would analyze addresses in an area and direct the carrier to faster routes. The Postal Service has tested various versions of dynamic routing for more than a year and will continue testing and implementing it in specific areas through December 2013. Postal Service delivery equipment was not designed to handle the upcoming growth in package volume. CBUs and apartment receptacles have package components, but space is limited. For example, CBUs are typically configured to only accommodate packages for two customers at a time. The Postal Service is designing larger mailboxes and intends to increase the number of package compartments on CBUs.

Improving the retention of city carrier assistants, establishing a shelving system for long-life vehicles (LLVs), and using parcel data would further bolster package readiness. Postal Service management plans to monitor Carrier Pickup data found in the Application System Reporting section in the Enterprise Data Warehouse and has developed three different shelving systems for LLVs. These systems are currenly under evaluation at five sites and could be available for deployment in the fourth quarter of FY 2014.

Meeting these challenges will help the Postal Service manage package growth, improve its competitiveness in the package business, and better meet customers' needs. As package delivery increases, what changes would you like to see in delivery and returns? Share your thoughts on our blog.

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