The U.S. General Services Administration (GSA) has contracts with carriers, such as Federal Express and United Parcel Service, to provide goods and services to federal agencies at discount prices. During fiscal years (FY) 2011 and 2012, federal agencies spent approximately $343 million and $337 million, respectively, to ship goods and services through GSA contracts. The U.S. Postal Service earned $1.2 million of that revenue in FY 2011 and $4.8 million in FY 2012, less than 2 percent of the overall market share. In a recent audit, U.S. Postal Service Office of Inspector General (OIG) auditors looked at how the Postal Service could increase its share of shipping revenue.

Although the Postal Service faces challenges growing its share of the shipping market, auditors estimated the agency could capture an additional $34.8 million of shipping revenue during FYs 2013 and 2014. They recommended the Postal Service address challenges of pricing flexibility, lack of 2- and 3-day guaranteed express delivery products, late entry into the shipping marketplace, sales force size and structure, payment methods, and air fleet requirements. They also recommended the Postal Service identify and develop strategies to enhance customer intelligence on federal agencies' shipping practices.

The Postal Service has begun addressing the current GSA contract pricing structure and plans to discuss payment methods and product selection for the federal sector. Share your thoughts on our blog.