As the U.S. Postal Service remakes itself into a leaner organization in the face of a communications revolution, it still remains a powerful medium and an important part of the nation’s infrastructure. A smaller Postal Service will still be huge, with more than $60 billion in projected revenue. It will not disappear tomorrow.
A lingering concern remains, however, that the Postal Service is becoming less relevant to younger Americans. A recent public opinion poll by The New York Times and CBS supports this conclusion. According to the poll, only 30 percent of people under 45 say they use the mail “all the time.”Read More
Do you ever wonder about the future? Will flying cars ever arrive? Are video phones here at last? Will the end of paper finally come?
Businesses can greatly benefit from knowing a little about future possibilities. At a time of great social and technological transition, understanding what might lie ahead can help businesses – like the Postal Service – prepare themselves to adapt.
Deutsche Post DHL, the logistics and delivery company, commissioned a study to look at the world in 2050. The study, Delivering Tomorrow – Logistics 2050, was prepared with the help of a firm of futurists and foresight experts. Through interviews with key experts, the study’s authors determined 14 key factors that could influence the future of logistics such as income growth and trends in trade regulation. Then, they investigated potential outcomes for these factors. The possibilities were combined into five potential visions of the future:Read More
The Postal Service Network of the Future
The Postal Service has proposed to reduce its network of post offices by more than 3,200 and consolidate over 250 mail processing locations. The goal is to optimize Post Office locations and streamline the processing network to better align with mail volumes that have declined more than 20 percent over the past five years. The Postal Service’s infrastructure was built to handle a mail volume of over 213 billion pieces. It is driven by a Congressional mandate for 6-day delivery to every delivery point, First-Class Mail® overnight delivery service standards in local areas, and a Post Office network viewed as a community infrastructure.
The Postal Service estimates that streamlining/optimization would generate over $3 billion in annual savings to help reduce the losses that topped $5.0 billion in 2011. Much of the projected optimization savings is associated with reducing the size of the workforce as approximately 80 percent of the Postal Service’s costs are employee related. The Postal Service is subject to collective bargaining and must follow its union agreements in any downsizing effort. More than 480,000 members of the workforce are covered by union contracts with binding arbitration frequently used to settle contract negotiations. In certain cases, these contracts have no layoff provisions and the ability to cross craft employees from one function to another is limited.
Many community leaders especially from small towns and rural areas have voiced significant concerns about elimination of needed postal services in their neighborhoods. Others have raised concerns regarding downsizing of needed jobs in the midst of an economic downturn. However, it is difficult for the Postal Service to justify a network built for mail volumes that are significantly higher than the current volumes being processed. It is also difficult to envision a future scenario in which mail volumes approach the numbers needed to support the infrastructure that is in place. Finally, in the digital age, the services needed by communities are evolving and the infrastructure for the 21st century may need to change to meet those needs.
We would like to hear from you on what an optimized Postal Service infrastructure looks like in the 21st century and beyond?
For this week’s topic, we’ve also asked the following guest commentators to discuss this topic over the next three days:
- Cliff Guffey, President, American Postal Workers Union, on Tuesday, March 13.
- Alan Robinson, President, Direct Communications Group, on Wednesday, March 14.
- John Callan, Director, Ursa Major Associates, LLC, on Thursday, March 15.
We hope you can join the debate. Please check in throughout the week for their thoughts, and share your comments along the way. On Friday, March 16, OIG will summarize and conclude the discussion on this important topic.
Our Guest Bloggers
|Cliff Guffey||Alan Robinson||John Callan|
Cliff Guffey is President of the American Postal Workers Union, which represents 220,000 employees in the clerk, maintenance and motor vehicle crafts.
Alan Robinson is the President of the Direct Communications Group. He has thirty years of experience helping firms and government officials deal with the regulatory, policy, marketing, and management issues associated with changes in competition within transportation, parcel delivery and postal markets. His thoughts on the challenges facing the Postal Service can be found at the Courier Express and Postal Observer.
John Callan is Managing Director of strategy consultancy Ursa Major Associates, LLC, focusing on the growth opportunities and transformational challenges in the postal-parcel-logistics space. He is also the founder of The PostalVision 2020 Initiative designed to envision the American postal ecosystem of the future.
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In an effort to reduce costs, the U.S. Postal Service has proposed cutting delivery service to five days per week by eliminating Saturday delivery. For a moment, let’s ignore the argument over whether the delivery days should be cut to five to ask another question: is Saturday the right day to cut?
While the Postal Service says Saturday has the lowest daily mail volume, it is the one day when most people are home to accept their mail. Some mail recipients say that Saturday is the delivery day they would least like to eliminate. Many periodicals and advertising mailers value Saturday above all other days because their customers have more time to read their magazines and ads and are more likely to act on them. Equally important, busy households are also available to accept packages—a competitive advantage the Postal Service has over the competition. Lastly, eliminating Saturday delivery could further crowd post offices with customers retrieving their packages.Read More
Out of 23 posts in industrialized countries, the U.S. Postal Service is one of the few remaining posts not offering an eMailbox solution to its citizens. And while there are private sector technology industry standouts in the U.S. that have developed widely popular e-mail and secure storage services, their business models sacrifice consumer privacy in the interest of ad-based revenue generation.
In an increasingly digital world, it may make sense for the Postal Service to offer eMailbox services in addition to traditional delivery. A consumer would also be able to sign up for an accompanying highly secure data storage area service called the eLockbox, which would provide added security for the archiving of important legal and personal documents with anytime, anywhere secure access. Today many electronic documents, especially financial records, reside primarily on the banks or billers Web site and not with the consumer.Read More