Tea leaves, crystal balls, palm readings: There are lots of ways to try to predict the future . . . and most of them are useless. Still, careful examination of measurable indicators — and a little imagination — can yield some clues as to what may lie ahead. That’s good news for the U.S. Postal Service, because if there’s anything that faces an uncertain future right now, it’s the nearly 240-year-old institution that delivers your mail every day.
Mere ink-on-paper advertisements are so last week. Cutting-edge ads, including direct mail, involve interactive features that were once limited to slick websites. How about something the size of a postcard that uses radio waves to send detailed product information to your smartphone and lets you to buy the minute you want to? Or a piece of mail that has an embedded, paper-thin video screen that you can control?
The aptly named Business Service Network (BSN) is charged with servicing the U.S. Postal Service’s 23,000 largest customers by addressing service issues, answering questions, and fulfilling other requests. Given the annual postal spend of this customer group – almost $38 billion in fiscal year 2013 alone – it clearly behooves the Postal Service to keep these customers happy.
You can’t cut your way to prosperity. That seems to be the message coming out of many of the comments we received on our recent blog about the next phase of network consolidation. So, if cutting alone isn’t the answer, what are your ideas for revenue growth?
Network consolidation will return in January 2015, a year after going on hiatus. The U.S. Postal Service announced recently that it would resume consolidations, closing up to 82 mail processing facilities. This second phase of the network consolidations should be done prior to the 2015 fall mailing season.
The Postal Service expects the changes to yield $750 million in annual savings and to affect about 15,000 employees. In 2012 and 2013, the Postal Service consolidated 141 mail processing facilities, resulting in cost savings of about $865 million.
Say you’re about to drive off for vacation in less than 48 hours, but you suddenly realize your license has expired. The nearest DMV office is 15 miles away, the waiting line probably just as long, and there’s just too much else to do to get ready. But imagine now that you can go to your local Post Office, which can handle the renewal right there and then.
The Internet may have eaten into the U.S. Postal Service’s First-Class Mail volume and revenue, but digital devotion does bring good news, too. Package shipping is on the rise, due in large part to the ever-increasing popularity of online shopping. The Postal Service’s future could brighten considerably because of this expanding market, but is the Postal Service prepared to compete effectively in it?