Much emphasis has been placed on reducing the Postal Service’s costs in response to its financial crisis. Yet financial viability could come in the form of a balanced approach that both reduces costs and increases revenue. How would a smart business respond to declines in its major products? Would it raise prices where possible in stagnant areas and invest the proceeds into existing or new growth areas? Would it selectively discount products to grow volume in price sensitive segments? Disruptive innovation, such as that underway in the communications sphere, requires change to ensure the Postal Service has what it needs to move beyond the critical crossroad it faces today.
The Office of Inspector General Risk Analysis Research Center’s new paper Postal Service Revenue: Structures, Facts, and Future Possibilities (Report Number RARC-WP-12-002) addresses the major components of the Postal Service’s revenue structure in Fiscal Year (FY) 2010, assesses existing opportunities permissible under the current framework, and discusses future options and policy considerations in a new era.
Loading ...Click here to read the Postal Service Revenue: Structures, Facts, and Future Possibilities white paper.
How would you approach the revenue issue to make sure the Postal Service continues to provide self-funded universal service to the American people?
This blog is hosted by the OIG’s Risk Analysis Research Center.
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What would a giant American company do to increase revenue when its model is slowly decaying? It would buy out competitors, buy leading startups in related fields where the industry is heading,(Zumbox), buy up related services like pre-sorters, printers, etc so it could offer end-to-end mail services – we print, sort, transport…everything.
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Get rid of the UNIONS and hire Vets.
We have benefits already
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I’m SO UNHAPPY with your idea to close small town post offices. Come on, use some common sense here. IF you close small town post offices, THEN it was cost YOU MORE for rural delivery drivers which means longer hours, pay more mileage, etc. Well DUH!! Rural folks & especially seniors, count on their local post office for many things from their mail delivery, to stamps, to that friendly face each day and the security of mail delivery. TOO MANY rural boxes have been damaged, broken into and mail stolen!! Personally I use our local PO Box for both security & our business since we are out of town alot. IF your having financial difficulty its SIMPLE, raise the mailing bulk prices because frankly I’m SICK of all the junk mail being put into the very PO Box that I pay for!! Unfair!! If they want to send out their pathetic junk mail, MAKE EM PAY DEARLY!! STOP giving breaks for bulk mail! And stop selling stamps at retail businesses so THEY get a cut. Last of all, OFFER small fee internet service/computers at post offices. Get on the internet band wagon, after all email is what hurt your profits to begin with. Thank you for listening!! And I do HOPE YOU LISTEN!!!
Seatonville, IL postal customer
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There is a way to lower operating costs, quickly and the savings pays for the upgrades. The actual backround on this was don By the Oak Ridge National Lab. It works and week call it the “Theory of Re”:
Reduce, Redeploy, Redistribute, Recycle, Re-commission, Recoup, Reprocess, Reclaim, Reuse, Recover, Regain, Reinvigorate, Refresh, Rejuvenate and SAVE the environment is our Responsibility
95% reduction in Carbon Footprint / a Maximum of 85% in Energy Savings
According to Oak Ridge National lab Retro Commissioning (R-Cx) a building can reduce the energy consumption by 50% or more. This is done through energy efficiency improvements in all areas of the building (the sum of all the parts). It is not about one single item but thousands of changes in the overall environment of the building space to effect a complete reduction in energy usage, carbon footprint, and cost to operate. Theory? Proven with 25 years of experience, more than any other company in the U.S..
About RE-ECO and Retro-commissioning (RCx), or Existing Building Commissioning
We are a company who is actively engaged in Energy efficiency and the optimization of all aspects of structures. Our firm began over 25years ago doing research and putting together Real-estate Projects that were designed to outperform traditionally built structures. RCx typically focuses on energy-using equipment such as mechanical equipment, lighting and related controls and usually optimizes existing system performance, rather than relying on major equipment replacement, typically resulting in improved indoor air quality, comfort, controls, energy and Resource efficiency.
RCx typically includes an audit of the entire building including a study of past utility bills, interviews with facility personnel. Then diagnostic monitoring and functional tests of building systems are executed and analyzed. Building systems are retested and Remonitored to fine-tune improvements. This process helps find and repair operational problems. The identification of more complex problems is presented to the owner as well. A final report, Recommissioning plan and schedule are then given to the owner.
Building “Performance Restructuring” (BRx)
Reducing the energy/carbon footprint of the nation’s buildings sector is essential for tackling climate change and will be an enormous challenge. Buildings account for 39% of U.S. carbon emissions and the consumption of 40% of the nation’s total primary energy, 73% of electricity, and 55% of natural gas (34% of natural gas excluding gas used to generate electricity consumed in buildings).
Optimizing a building’s energy performance requires an integrated design approach to minimize the building’s energy consumption while meeting all the occupants’ needs. Integrated design is an important aspect of optimizing energy performance, including equipment selection, because decisions made in one area (lighting, for example) will affect others, (such as chiller sizing). The building’s re-design is only first step to optimizing its energy performance. The building must also be constructed or re-constructed as designed and RE-commissioned on a regular basis. Measurement and verification of the building’s actual energy performance also plays an essential role in optimizing its energy performance
An approach for quantifying optimized energy performance is to set goals and to compare measured energy consumption to the predicted consumption had the building’s energy design not been optimized. EPAct 2005 requires new buildings to use 30% less energy than a building meeting the requirements of ANSI/ASHRAE/IESNA Standard 90.1-2004 or the IECC. Aggressive energy efficient designs and retrofits have used 70% less energy than standard buildings.
What Can You Expect from Re:
Minimum Savings from Deep Retrofits on overall Utility Expenses
50% savings
Minimum Savings from CHP (Combined Heat and Power) installation
35% savings
CHP is installed after Deep Retrofits Combined Savings
Potential 85%
Cost outlay by customer 0
How? Let the savings pay for the Retrofits
***Here is How:
**Deep Retrofit in specific energy intensive areas:
Insulation (spray foam)
Summer estimated Savings 70%
Winter 50%
Electric Conversion
AC / DC 15%
Energy Management 10%
Window and Doors
Low E film application 3%
Reseal for air leakage 5%
High Efficient Appliances 15%
Lighting Change
LED lights 85%
LED solar Signage 100%
LED exterior solar lighting 100%
Micro Combined heat and power savings 85%
**Percentage of energy savings is based on item specific changes to the individual area. Example a New Cree LED lights (XLamp XP-G) uses 50% less energy than a CFL lamp (compact fluorescent)
***Tests were performed by the Oak Ridge National Lab to determine prescriptive methods for Deep Retrofits.
Example of a School cost model:
Utilities Costs Prior to Deep Retrofits Example $10,000 per Month
Utilities Costs savings after Deep Retrofit 50% savings $ 5,000 per Month
Additional Saving with Installation of CHP 35% savings $ 1,750 per Month
Total Combined Savings 85% $ 6,750 per Month
Utilities Costs after Retrofit and CHP installation $ 3,250 per Month
(Cost Prior – Combined Saving)
Monthly cost of Retrofit under contract* $ 4,750 per month
Utilities Costs after Retrofit and CHP installation $ 3,250 per month
Total Monthly cost of utilities after $ 8,000
Initial saving to customer 20%
(costs Prior – Month Cost after) $10,000 – $8,000 = $ 2000 per month
Sale of excess Power estimated $ 1000 per month
Sale of AEP credits $ 500 per month
*Sale of excess Power and Credits are held by trustee to satisfy retrofit costs in addition to $4,750
**Additional Revenue to the customer of excess power sold into the grid and Alternative Energy Credits (AEP) or Renewable Energy Credits (REC) has NOT been added to the estimation. These profit centers would increase the potential return and reduce the time of the contract.
***Retrofit costs are the sum of all the fees for the upgrades to the building on a long term contract. These are based on the individual requirements of each project with an average cost of $10 per square foot. These may include new insulation, energy management, HVAC upgrades and repairs, water reduction, high efficiency appliances, windows, doors, Low E film applications, lighting upgrades, and more.
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Wellllllllllllllllllllllll, we could simply live underground, and forget about all of the other Sustainable
Solutions.
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http://www.c-spanvideo.org/program/FutureofthePos
So, when exactly did you recognize that mail volume was catastrophic anyway?
So, what exactly is the derivative/ratio of the following numbers?
By the Numbers
67 billion — revenue in 2010, in dollars
171 billion — total number of mail pieces processed in 2010
563 million — average number of mail pieces processed each day
23 million — average number of mail pieces processed each hour
391,000 — average number of mail pieces processed each minute
6,516 — average number of mail pieces processed each second
40 — percentage of the world’s card and letter mail volume handled by USPS
1.9 billion — dollar amount paid every 2 weeks in salaries and benefits
574,000 — number of career employees
75 million — number of workhours reduced in 2010 – equal to 42,800 full-time employees
215,625 — number of vehicles in the Postal Service fleet — the largest civilian fleet in the world
1.25 billion — number of miles driven each year by our letter carriers and truck drivers
399 million — number of gallons of fuel used in 2010
31,871 — number of postal-managed retail locations nationwide
41.5 million — number of address changes processed in 2010
1.3 million — number of people who visit usps.com each day
223 million — dollar amount of online stamp and retail sales online at usps.com in 2010
423 million — total revenue, in dollars, from Click-N-Ship label purchases in 2010
6.7 million — number of passport applications accepted in 2010
123.6 million — number of money orders issued in 2010
577 million — dollar amount generated from Automated Postal Centers in 2010
63,000 — number of stores, banks and ATMs that sell postage stamps
735,779 — number of new delivery points added to the network in 2010
0 — tax dollars received for operating the Postal Service
In other words, how much did every single employee generate in revenue
during the fiscal year 2010?
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I posted this comment thinking there might be a another decade left in the USPS 2020 strategic vision.
I was wrong! Better lock those upstairs office windows at
GMF’s.
https://www.paperkarma.com/
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Now compare that with FED-X, or UPS.
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The Post Office should charge at LEAST $1.00 to mail a letter. Look at what FEDEX Charges. You should modernize the post office and perhaps begin some type of email service of your own that Certifies letters. Don’t close down small post offices in rural communities for heaven’s sake. They should make going to the post office a nice experience. Instead, right now, you have to wait in line and it’s crazy, cause you see employees walking around and not helping their customers when they are on sight.
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I have rented a post office box for a number of years and felt that the individuals who recieve free home delievery were not paying their fair share … Why not charge a nominal fee for home delievery?
if people donot want to pay … let them pickup their mail as general delievery at the nearest post office!
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Since the letter carriers go door to door in all kinds of bad weather, 6 days a week. Why can’t they check on the elderly while delivering mail. Seniors or children worried about their elderly parents could pay a weekly fee to the letter carriers. In return, letter carriers could somehow report back daily to a website or something that can be checked daily by their patrons. The elderly could leave an “I’m okay” card in their mailbox each day to confirm that they are alive and well. If a response is not found daily, the letter carrier calls the police and the police contact someone.
Just a thought.
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A few thoughts I have for USPS to possibly make things more efficient and increase revenue:
Have one bulk pick up/delivery of mail to and from the Post Office instead of multiple deliveries. Would save on transportation costs.
Better weekly hours. A couple small Post Office’s in my area have hours 8:30 – 4:30. How are working people supposed to get there to mail packages when most work about 7 AM until 5 or 6:00 PM? Open later in the morning and as a result stay open longer in the evening, may boost usage and sales. Is it possible to standardize Post Office hours across the US?
Do all Post Office’s need to close the window at lunch for an hour? Why is it the postal clerks cannot stagger their lunch times??? Would provide additional time for people to mail items and possibly increase sales instead of going to an independent shipping business.
If there will be no mail on Saturdays, does this mean there will be no postal employees working at all, including bulk transportation (and other behind the scenes activities that will cost money) and at the actual Post Office counter? If the Post Office is closed on Saturday, how are working people supposed to mail/pick up their packages when they cannot get there through the week because the Post Office closes at 4:30?
Offer early retirement to eligible employees and do not fill any unnecessary positions.
Just my two cents worth of opinion!!!
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NICE TRY MY MAN! You gotta get with the program?
The USPS has an unusual set of operations that is as sacred as the golden egg laying chicken or COW.
Tour 1 Rank & File
Tour 2 ”
Tour 3 ”
Casual or PSE or Temp Carriers compliment, all tours, any hours, any days, any conditions, sick, tired, or medicated.
Carriers 0800-1700 (or thereabouts)
Management 0700-1600 (or thereabouts)
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Why don’t you sell comercial advertising on your stamps? It would rains revenue and do away with all those silly flowers and stuff that we can’t figure out which end or side is up anyway!
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HOW ABOUT THIS ? A number of folks out there don’t entirely trust e-mail or tweeting a message. If USPS had a SECURE site where a person could type out a letter/message privately, pay a fee, & send it via USPS AS A LETTER, they’d know that it would be DELIVERED BY HAND to an actual person. Something to think about in raising revenue . . .
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I will go with option 1, offer new services the only solution to all these problem.
Offer new services like that of other major foreign posts (logistics, banking)
And use latest technology in all aspects.
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The Post Office should charge at LEAST $1.00 to mail a letter. Look at what FEDEX Charges.
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I find your post is very helpful
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I can think of two ways to increase revenue without having to increase the cost of stamps or services. #1) charge a small annual or semi-annual fee to ALL addresses that receive mail. The cost of the rural mailman or the big cities alike is astronomical. Can you imagine how much money would be generated if EVERY address was charged even $10 per yr? A city with 100,000 addresses would bring $1,000,000 a yr. and that’s just a small city. What about New York City or Houston?? It costs more to deliver mail to a home (especially rural) than it does to deliver it to a post office box. So why are we having to pay more and more for box rent, when home deliveries are free? #2) Sell advertising on the stamps. Another huge money maker.
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1. Please stop the 1-cent, 3-cent-, and 7-cent increases. Take the First Class rate to 45-cents or 50-cents, and keep all future rate increases in increments of 5-cents. All rates should be divisible by 5. Postage rates that involve pennies should be outlawed.
2. Make the First Class rate the least expensive rate. This will either increase your revenue, or it will reduce the operating cost of my Mail Carrier delivering JUNK MAIL to me, and me having to throw it away. Think of it this way, you will also be helping to save the environment.
3. Automate, Automate, Automate! Why do I still need to stand in a line for 15-minutes, in order for a Postal Clerk to put my envelope on a scale, push a few buttons, and say “That will be 64-cents. Do you need anything else today?” Give me the tools that he/she has and I will do it myself. I’ve been pumping gas on my own for years, I know how to use ATMs, and I can even get my own Boarding Pass at the airport (actually, I print them at home.) Granted, there may be times when I need the assistance of a Postal Clerk, but there are many times I can handle my own transaction if I had the tools– at the Post Office. Yes, I know I can do a lot of transactions online, assuming I knew the weight of my envelope or package, which I don’t.
4. The USPS provides a very valuable service; you simply need to change the price structure to stay competitive.
Thank you!
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I ASKED MY SON WHAT HE THOUGHT ABOUT THE POST OFFICE ADVERTISING ON THEIR TRUCKS AND CHARGING FOR THIS SERVICE AND HE SAID THAT HE THOUGHT IT WAS A GREAT IDEA. WE VISITED CANADA AND GUESS WHAT? THE CANADIAN POSTAL TRUCKS ADVERTISE.
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YES. I THINK THAT’S A GREAT IDEA I.E./ ADVERTISING ON POST OFFICE TRUCKS. ILL GOUIN
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Home delivery Monday Wednesday Friday. Keep special business delivery Mon-Sat. Keep small town buildings unless you can join a grocery store building like the pharmacy does. Advertise on trucks to help pay for Eaton hybrid conversions. Plug in electric vehicles for under 40 miles routes.
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I heard a radio story about a man who is photographing thousands of beautiful old post offices, many built by the WPA. His romantic view of these historic American buildings, lead me to think that Post Offices are public buildings and should be used for multiple community events. They need to become gathering places for a community, and service more than just the mail. Perhaps some city consolidation into postal buildings as they become smaller in scope will keep them preserved. Serve coffee, host a town hall event, whatever each community wants to do in its post office. Use the post office as an additional city service building. Rent out grand lobbies for events to raise additional revenue.
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