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USPS OIG — Domestic Merchandise Returns and Forwarding

April 24, 2015 Comments off

Domestic Merchandise Returns and Forwarding (PDF)
Source: U.S. Postal Service, Office of Inspector General

The package delivery market is an important and growing segment of the U.S. economy. American businesses and consumers spent more than $68 billion in 2013 to ship packages domestically. As part of this package activity, merchandise sometimes needs to be returned to the merchant or forwarded to a different address designated by the recipient. A recent study conducted from April to June 2013 showed that just over 5 percent of business volume (over 500 million pieces) was returned using a carrier shipping service. The domestic returns business is worth an estimated $3 billion annually and is expected to approach $4 billion by 2016.

The U.S. Postal Service is active in the returns market, having generated about [redacted] in returns-related revenue in fiscal year (FY) 2014. The potential of this market was recently acknowledged when the vice president, New Products and Innovation, stated, “Returns play an important role in our efforts to grow our package business.” The Postal Service has also released its new “Already There” advertising campaign aimed at promoting the ease of its return services. In addition, the Postal Service generated about [redacted] in forwarding-related revenue in FY 2014. To support this growing market, the Postal Service offers a variety of merchandise return and forwarding products and services and continues to develop additional services to keep up with eCommerce, digital innovations, and changing customer preferences.

The objective of our review was to identify opportunities for the Postal Service to grow its merchandise returns and forwarding revenue. To that end, we researched global trends, reviewed actions of foreign posts, met with Postal Service managers and returns companies, and examined prior U.S. Postal Service Office of Inspector General reports.

Postal Service Revenue: Is the Glass Half Empty or Half Full?

April 16, 2015 Comments off

Postal Service Revenue: Is the Glass Half Empty or Half Full?
Source: U.S. Post Office, Office of Inspector General

We have all read the negative headlines of U.S. Postal Service’s looming financial demise. However, in its new paper, U.S. Postal Service Revenue: Is the Glass Half Empty or Half Full?, the OIG finds that the Postal Service may be turning a corner. An increase in parcel volume, significant cost reductions, and the exigent price increase are collectively driving an improvement in the Postal Service’s financial health.

Nevertheless, the Postal Service still faces numerous challenges, including the continued and persistent decline in First-Class Mail volume, an ever-increasing number of delivery points, and an increased need to make investments for its future. While significant, these challenges are not insurmountable. In order to further improve its financial position, the Postal Service will need to focus on increasing the revenue yield of its traditional products wherever market forces and conditions allow, including taking advantage of the growing parcel market. In addition, the Postal Service would benefit from diversifying into other areas of business, especially logistics and financial services.

Four in 10 Americans Look Forward to Checking Mail

April 7, 2015 Comments off

Four in 10 Americans Look Forward to Checking Mail
Source: Gallup

In a world of email, texts and social media, 41% of Americans nevertheless look forward to checking what is in their mailbox each day. Americans 65 and older are more likely than younger adults to enjoy checking the mail, but 36% of Americans under 30 also feel this way.

USPS OIG — Issue Brief: Letter Carriers: Modern Day Milkmen?

March 9, 2015 Comments off

Issue Brief: Letter Carriers: Modern Day Milkmen?
Source: U.S. Postal Service, Office of Inspector General

Highlights

  • The Postal Service and AmazonFresh are jointly experimenting with grocery delivery — a market set to grow in the near future.
  • Because of its extensive fleet, last mile advantage, and reputation for reliability, the Postal Service could be well-placed to play a key role in this space.
  • There may be opportunities to collaborate with other retailers and producers, create an online shopping mall, or capture different areas of the value chain.
  • The Postal Service needs to continue to experiment now with different strategies if it wants to be an effective player in this growing market, as the number of new entrants is quickly growing.

USPS OIG — What Postal Services Do People Value the Most? A Quantitative Survey of the Postal Universal Service Obligation

February 24, 2015 Comments off

What Postal Services Do People Value the Most? A Quantitative Survey of the Postal Universal Service Obligation
Source: U.S. Postal Service, Office of Inspector General

The OIG has conducted a nationally representative quantitative survey on the relative value of some key services provided as part of the universal service obligation (USO). This study is the first of its kind in the United States and was done in conjunction with the market research firm Gallup and Professor Michael Bradley of George Washington University’s Department of Economics. The study, What Postal Services Do People Value the Most?, focused on four attributes of the USO: mode of delivery, access to postal services, frequency of delivery, and price. This study is a follow-up to our white paper Guiding Principles for a New Universal Service Obligation in which we discuss the need for such a study.

The survey found that both consumers and businesses still value postal services, especially door and/or curb delivery instead of delivery to a cluster box or parcel locker. Respondents also value the ability to access postal services through post offices, rather than using other alternatives such as postal counters in non-postal retail stores and self-service kiosks. In addition, while consumers and businesses are indifferent when it comes to the Saturday delivery of letters, consumers still place value on the Saturday delivery of parcels. Furthermore, consumers and businesses also value lower prices and may be willing to accept lower levels of service to keep prices from rising sharply.

USPS OIG — Window Retail Customer Service: Audit Report

February 12, 2015 Comments off

Window Retail Customer Service: Audit Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

Between FYs 2012 and 2013, an increasing number of customers expressed dissatisfaction with the service they receive at retail facilities. While the Postal Service’s goal is 90 percent customer satisfaction, in FY 2013 more than 20 percent of customers who responded to surveys stated they had been treated “worse than other retailers” at Postal Service retail counters.

Dissatisfied customers exist, in part, because procedures for improving customer service are not functioning as intended. Although management communicates with sales associates periodically via service briefings known as “stand-up” talks and provides video instructions, there is a lack of continual, formal customer service training. Further, sales associates are selected based on seniority rules, rather than suitability for the position, as suggested by best practices. In addition, the Postal Service does not have a mandatory process to ensure managers regularly observe sales associates and provide feedback. Regular observation would help sales associates recognize where they need to improve their performance.

Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail

February 10, 2015 Comments off

Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail
Source: U.S. Postal Service, Office of Inspector General

By now, it’s fairly common knowledge that digital communications has cut into First-Class Mail volumes. But does this necessarily mean people always prefer to communicate digitally? To find out, we looked at the trends and customer preferences for one particular mail segment – transactional mail, which consists primarily of household bills and payments.

We collaborated with the consulting firm InfoTrends to analyze 3 months’ worth of customer billing data from a major U.S. utility. We also jointly interviewed executives who manage bill delivery and payment processing to help determine how the utility’s delivery-and-payment costs and customer preferences compare with those at other utilities and even in other industries.

Our new white paper, Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail, details how we found that despite a clear preference to pay bills online, 91 percent of customers prefer receiving their bills by mail. Even among the utility’s newest customers — those expected to be more digitally savvy — an average of 89 percent opted to have their bills mailed to them, though, like the others, most preferred paying online.

People like having a physical mailpiece as a reminder to pay and as a record-keeping tool. The executives interviewed said this is consistent with what they’ve been seeing and hearing. It’s also consistent with one thing consumers almost everywhere have made clear: they want choices in just about everything, including bill delivery and payment. In addition to being good news for the near-future of transactional mail, our findings suggest that a company offering a variety of bill delivery and payment options can help keep customers happy. And as the executives noted, while costs are always a concern, including billing and payment costs, customer satisfaction is often equally important, if not more.

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