Who Should Pay for Mail Forwarding?
More than 40 million Americans change their address each year, which means the U.S. Postal Service forwards an awful lot of mail. In fiscal year 2010, it forwarded 1.2 billion pieces. Under the Postal Service’s regulations, customers who fill out a change of address form have their mail forwarded to their new address for 12 months after the move. Mail forwarding costs the Postal Service almost $300 million a year. The cost to return mail to sender is another $800 million.
The cost of mail forwarding – and returning to sender and treating as waste — is baked into the overall First Class Mail rates, so all customers effectively pay for this service whether they use it or not. Canada Post has taken a different approach to mail forwarding, charging recipients either an annual or semi-annual fee when they move. Residential customers pay $75 for 12 months of forwarding and business customers pay $235. These prices increase slightly if the person or business moves to another province.
Read MoreIs the Brand Suffering?
The Postal Service has built a strong brand name around service, trust, and security. Few other organizations can lay claim to such a strong brand, one with more than 200 years of history and cultivated by the Postal Service’s consistent fulfillment of its mission to securely deliver mail to every American, regardless of location, at a reasonable price. For 6 straight years, the Ponemon Institute has named the Postal Service the most trusted government agency and one of the top 10 most trusted businesses in the nation. Many postal observers have encouraged the Postal Service to leverage this “trusted brand” to expand its offerings in the digital market.
But a steady drumbeat of bad news over the past few years around its financial situation, potential cuts in service, and uncertainty over its retail and network downsizing plans has unsettled stakeholders. The question many of them ask is whether the ongoing negative news coverage could be hurting the overall brand. Even the PMG noted earlier this year that the mailing industry is experiencing a “crisis in confidence.” Lingering uncertainty about the Postal Service’s future could further erode confidence. Further, competitors can use the turmoil to their advantage, touting their own services as easy and reliable in the face of uncertainty.
Read MoreUnused Land Parcels – Sell, Hold, or Develop?
The U.S. Postal Service is one of the largest real estate owners in the United States with more than 8,600 facilities and 950 million square feet of land. (The Postal Service leases another 24,600 facilities.) It also has about 357 unused land parcels with no structures on them, which have a book value of $128 million. The lands’ assessed values are likely to be significantly higher.
The Postal Service has contracted with real estate company C.B. Richard Ellis to sell its surplus real estate, which includes both buildings and land. You can find the properties on the following website, http://www.uspspropertiesforsale.com/. The sale of properties would generate cash flow for the financially strapped organization. It would also contribute to streamlining its physical footprint as the Postal Service aligns itself to be a leaner, faster, and more market-responsive organization. However, the sale of real estate assets would not produce recurring revenues.
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