While the Postal Service leads the world in processing letter mail, private sector competitors have a higher market share for parcels. And while letter volumes are decreasing, parcel volumes are projected to increase. Although parcels represent less than 2 percent of mail volumes, the Postal Service parcel business makes up 13 percent of the market share in the U.S. The chart on the left depicts the market share for parcels. Just how do parcel industry giants keep their costs down and productivity up, even in today’s economic environment? And, is there anything that the Postal Service can learn from them?
After visiting operations of the two parcel industry giants, the OIG learned that although the Postal Service has many things in common with the industry giants, it could also learn a few things. The benchmarked entities and the Postal Service process parcels both manually and use automation. However, the following best practices came to light:
- Employees are predominantly part-time, often working four-hour shifts with staggered start times to accommodate volume loads.
- Employees are moved among tasks quickly to meet the needs of changing volumes, including crossing-crafts between unloading, scanning, processing, and even facility maintenance.
- Parcels move quickly through the facilities, generally on conveyor belts, and are not staged in transport equipment in waiting areas or moved around between pieces of processing equipment manually.
Which of the best practices listed above do you think would most positively impact the cost of handling parcels in our processing centers if the Postal Service implemented them?
This blog is hosted by the OIG’s Network Optimization directorate.