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USPS, Perspective from a customer.

September 23, 2011

The United States Postal Service (USPS) is facing a fiscal crisis and it’s been quite uproar in Washington and online world for what to do next. USPS is among largest employers of USA and important part of American history & pride. Postmaster General and CEO ‘Patrick Donahoe’ has presented his testimony in front of congress. (link). There, he has emphasized on cutting costs by reducing number of postal employees, consolidating & closing postal processing units, closing post offices etc. Also with very abstract proposal of ‘streamlining process and product offerings’. So far, other than cutting costs, he has not suggested any of concrete methods to increase revenue. And here comes my purpose of writing this blog.

I come from software development career, spanning 15yrs. I have been keen observer of how commerce industry innovating and finding new methods to market and sell their services and products. On same line, here is 10-point suggestions for USPS.

  1. Use Your Real Estate
USPS got 32,000 retail locations. Inspite of real estate crash, 32,000 locations is big piece of asset and lots of floor space. They need to start recognizing value of their floor space in middle of towns and put them to use. Recent example of 7-Eleven stores will allow amazon.com local pickups. USPS can allow some kind of locker services or start some program, where online retailer or new retailer can deliver/pickups through their retail location. Here is another example, allow Redbox movie kiosks.

  1. Make Priority Shipping More Simple and Intuitive
Add tracking number by default. In 21st century, getting status and confirmation of their shipment, has become standard. That’s one of biggest reason, I use UPS. Make pricing simple. Lets say two fixed prices for small and big priority box. (Yes, USPS already does that, I am moving towards, to make it more standardizing in their priority offering).

  1. Use Global Shipping As Strength
U.S. Postal Service revenue from international mailing and shipping products has seen a 12.3 percent year-on-year increase so far in the first three quarters of the 2011 fiscal year.”  I think, USPS international operations and contracts with international postal services is big asset for them. I am surprised, why they are not marketing it and streamlining it. USPS provides international priority and standard shipping. Of course, whenever you do, you end up filling in multiple documents as required. They need to make it simpler to ship and price attractive. Coupled with marketing, USPS can capture & encourage, immigrants segment of their customer. Think of shipments going from USA (USA Brand) to countries like India, Mexico, Spain. European tourist come to USA, to do shopping around Thanksgiving holidays. It’s big market outside USA for USA retailers. They can be right shipping company for businesses and individual consumers.

  1. Do not Take Away Saturday Delivery And Introduce Sunday Express
This is one of new measurements, Mr. Donahoe proposed. I am pretty sure, he is trying to pick low hanging fruit for now. My perspective is, use Saturday delivery as one of strength. In fact, if why don’t you give laid off employees to work part time on Sunday, for express mail deliveries. Think of marketing USPS can do, where you ship on Friday and residential customers can get it on Sunday.

  1. Add Automated Postal Center (APC) In Every Location. In fact Add Two.
Factoid: APC can provide the services needed for 85 percent of post office visits. I have it in my zipcode and loves it. Only problem, I have seen, if someone is hogging the machine for full ½ hr. I really wished they have two APC machines. Assuming, 85% people can use APC for USPS deliveries, think of that, number of people wants to stand in line for window service. Plus, incentive of lower rate compare to window service, is good enough for most of shippers.

  1. Add More Informational Posters And Provide Pamphlets to Educate Shipper For Different Options

I am not sure, if USPS ever gathered analytical data like percentage of different services rendered at retail window. What I personally feel, if USPS put some more posters on different services and even put some matrix table, comprising weight/rate columns, then shippers doesn’t have to take help. Let him/her use APC afterwards.

  1. Reduce Number Of Service Employees Per Location to ONE.
In combination to above mentioned proposals, USPS can reduce number of employees needed to manage a retail location. It’s contrary to proposal to close down retail locations. I think, instead of closing loss-making locations, turn them into profit making units or at-least let them self sustain.  

  1. Get Contractors Instead of Employees.
It’s been established in testimony of Mr. Donahoe, paying salary to Employees and their health benefits plus mandatory retirement benefits is one of major expense compare to other private shipping companies. I understand, USPS employee union may not appreciate this idea, but in this economy and age, paying by hour makes more sense. Getting health insurance for a private contractor is another painful topic of America, I won’t go there. By implementing policies to hire seasonal private contractors, USPS can smartly manage their workforce expenses with-out worrying about ever increasing health insurance and putting money in retirement funds. Further expanding on this idea, for full time employees, USPS can start incentive based salary structure, like basic salary + performance based bonus. Performance can be measured using number of hours, number of packages handled or number of customers dealt with.

  1. Empower “Approved Postal Providers”, More Than Just Selling Stamps.
We all have seen, checkout counters on many grocery stores or bank windows, giving you option to buy usps stamps. Why doesn’t USPS do some pilot programs with interested partners, let them provide more services of USPS. Simple services like Accepting mail, Accepting Priority boxes, Selling USPS approved packing boxes, various documents. Even ask them to allow, to install APCs at their premises (on commission/affiliate basis.). It’s all about getting more packages into USPS delivery. More volume means more money and more utilizing mammoth infrastructure of USPS.

  1. Provide Other Services Through Their Service Window.
Currently, whenever I see big line for window service, I always wonder, how many customers thinking of other things, they need to do, like buying phone cards, coffee (i know, i know 🙂 ) or small items they need to buy. Well, why don’t we use time of postal worker to sell more and generate more money for their employer. (which is USPS). UPS stores sell things other than shipping supplies. Few of things, I can think of, phone cards, greeting cards, copy using copier machines, fax ability.

Other Small Ideas

  • Open early on weekdays. Work with working and paying class of customers. How many working people can come between 10am to 5pm. That’s why it’s crazy during lunch hours.
  • Hire students part time, to pre-handle customers entering post office. Let them assist/teach customer, how to use APC machines or fill forms. Target is customer is handled as quickly as possible and spend less time with USPS employee on unnecessary trivial things.
  • In this Internet age, make your USPS online shipping site super easy and intuitive. Hire 3rd party consultants to do usability study and design.

Facts & Numbers

  • The Postal Service delivers 212 billion pieces of mail to over 144 million homes, businesses and Post Office boxes every year.
  • The U.S. Postal Service ended its third quarter of fiscal year (FY) 2011 (April 1-June 30) with a net loss of $3.1 billion, compared to a net loss of $3.5 billion for the same period in FY 2010. Total mail volume declined to 39.8 billion pieces for the quarter, compared to 40.9 billion pieces in the third quarter of FY 2010.
  • U.S. Postal Service revenue from international mailing and shipping products has seen a 12.3 percent year-on-year increase so far in the first three quarters of the 2011 fiscal year.
  • Postmaster General is Patrick Donahoe
  • The Postal Service ended Quarter III of fiscal year 2011 (April 1 – June 30) with a net loss of $3.1 billion.  Net losses for the nine months which ended June 30 amount to $5.7 billion and we are currently projecting a net loss of up to $10 billion by the end of this fiscal year, depending on interest rates.

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A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. We’re everywhere so you can be anywhere:www.uspseverywhere.com. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $67 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 29th in the 2010 Fortune 500. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency six consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

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