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 More
Every year, millions of Americans send holiday greeting cards through the mail to friends and family around the country. Usually this means a trip to the store to pick out cards, the Post Office to get stamps, sometimes even a photographer to capture that perfect holiday photo, and another trip to the Post Office to mail the cards. But now there are many options for creating a holiday greeting card that save both time and money. Not only are these options a potential boon to consumers, they are an opportunity for the Postal Service.
Several years ago, Hallmark® introduced a hybrid greeting card that customers can order online. For one price, customers create a card by choosing a design and uploading their own photos and even choosing the day the Postal Service delivers the card. This year, Apple® introduced Cards, a smartphone application that allows customers to create and mail hybrid greeting cards directly from their iPhones. Still, for those who love the experience of shopping for cards, a number of Postal Service retail locations offer a selection of greeting cards allowing customers to buy, stamp, and send them from the same location.Read More
When mailing a letter that weighs about one ounce, the U.S. Postal Service’s 44 cents is one of lowest First Class postage rates. Whether you are mailing a letter locally or sending a greeting card across country, it still only costs 44 cents now, but will increase to 45 cents in January. The graph below compares the U.S. Postal Service’s postage rate with other countries. As you can see, Norway charges the highest rate, which is nearly four times the cost U.S. rate.Read More
The U.S. Postal Service has aggressively moved to reduce costs by consolidating its processing network and realigning its delivery facilities. However, it has essentially eliminated rail transportation, which is the least costly way to move mail long distances.
During the recent economic downturn, railroads invested heavily in infrastructure to improve service. Private industry shippers of time-sensitive materials have responded to these improvements by shifting volume from highway to rail. UPS (the largest rail customer in the U.S.) attempts to put any package traveling over 750 miles on rail. JB Hunt, one of the Postal Service’s largest highway contractors, has shifted a substantial freight volume to rail and now earns more than one-third of its overall revenue from intermodal rail transportation.
The potential benefits to the Postal Service are clear. Rail is a less expensive and more environmentally friendly transportation mode compared to trucking. Recent estimates show that intermodal rail service can improve fuel efficiency by about 3.5 times relative to highway tractor-trailer service. In addition, rail gives the Postal Service more capacity flexibility as this mode can operate one-way, while highway transportation must be purchased in round-trips. Since Postal Service volumes tend to flow from north to south and east to west, utilizing rail would avoid the cost of paying for empty or near-empty trucks on the return trips. Rail is also far less susceptible to the weather interruptions that can wreak havoc on highways.
In recent years, a growing number of people have chosen to avoid crowded shopping malls by doing their holiday shopping online. To a certain extent, online shopping reduces their carbon footprint by keeping these individuals from driving to and from the store. However, their packages still have to be delivered. What if postal customers could choose to have carbon neutral delivery for an extra fee?
In 2009, Itella, Finland’s postal service, introduced a program where customers could pay extra for carbon neutral delivery, adding the “Itella Green” marking to letters for less than a penny or parcels for around five cents. Itella achieved carbon neutrality through a combination of energy efficient delivery vehicles by funding reputable, environmentally-friendly projects. While Itella’s plans include increasing carbon efficiency in all three phases of the package delivery process: sorting, transportation, and delivery, the greatest carbon efficiency gains currently come from their shift to electric or fuel efficient delivery vehicles.