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USPS — Retail and Delivery: Decoupling Could Improve Service and Lower Costs

October 3, 2011

Retail and Delivery: Decoupling Could Improve Service and Lower Costs (PDF)
Source: U.S. Postal Service, Office of Inspector (via Consumer Postal Council)

The U.S. Postal Service’s (Postal Service) retail and delivery operations have been “coupled” both organizationally and physically since delivery services were first established almost 150 years ago. The location of these facilities, housing both delivery and retail, was primarily determined based on historical patterns or the need for delivery service efficiencies — with retail performance typically being a secondary consideration. However, there have been dramatic shifts in the marketplace and the Postal Service could benefit by reexamining such long standing practices with the opportunity to improve service, raise revenue, and lower costs. The purpose of this paper is to strategically examine the concept of “decoupling” delivery from retail, thereby breaking a long-standing organizational tradition. Such decoupling could be physical, managerial, or both.

In this study, we draw upon the experiences and insights of key stakeholders in the postal community, private sector delivery companies in the United States, and foreign postal operators to gauge potential consequences and outcomes.

In short, we found that while the Postal Service has made some steps in this direction, a much broader and more strategic implementation of decoupling could add value to the Postal Service by lowering costs and improving service to the American people. We believe that carefully decoupling retail and delivery both physically and managerially primarily in urban and suburban areas would have the most practical benefit. These changes could provide improved customer service for existing products and better options to the Postal Service for reconfiguring both its delivery and retail networks and offering retail products and services that can best respond to changing market conditions and diverse customer needs across the country.

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