Separating Roles of the USPS

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A recent story by the BBC on mail delivery in Afghanistan highlights one of the most important roles of the Postal Service, maintaining and standardizing the nation’s system of addresses and postal codes.  Afghanistan has neither a standardized system of address nor postal codes.  In fact, in many parts of the country, there are no street names, let alone street names at all. For the postmen of Kabul, navigating the maze of the city is a daunting task. It is a city of more than four million people and one in which hundreds of homes and streets are being developed every year. There are few street names and house numbers, and the [...] Read more »

Australia Post Retail Strategy

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Australia Post’s retail strategy provides the best example of a retail strategy that could serve both urban and rural communities in the United States.  Australia Post serves both very large cities and some of the most rural areas in the developed world.  Australia Post also illustrate what is needed in develooping that can use both corporate and contracted outlets with most retail services provided in contracted or franchised outlets.   Australia Post is of particular interest as it most proved retail services to a significant number of communities that are as remote as any community in the most rural parts of the United States. Australia Post has four  types of contract or franchised outlets. Licensed Post Offices provide [...] Read more »

Saving Retail Postal Services

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The Goin’Postal franchise in Fenton, Michigan recently announced that it has expanded its offerings to include office supplies. This announcement provides another illustration that stand-alone mailing or parcel shipping retail outlets cannot survive unless they provide a diversified selection of business and/or consumer products and services. In the United States, the corporate outlets of FedEx and franchised outlets of United Parcel Service operate as business service centers. After its purchase of Kinko’s, FedEx eliminated a number of its parcel shipping only retail outlets with outlets offering printing and copying services as well. The outlets, renamed FedEx Office have father diversified its services by adding more office supplies and digital printing [...] Read more »

John McCain and the Politics of Postal Reform

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Yesterday, John McCain introduced a postal reform bill that his press release describes as the “companion to the legislation that Representative Darrell Issa introduced in the House of Representatives.” Based on press reports, the bill combines elements from the Issa-Ross Postal Reform Act of 2011 with proposals that Senator McCain made earlier this year in amendments to other legislation. By calling his proposal a companion legislation to the Ross-Issa House bill, Senator McCain allowed Congressman Issa rename his bill the Issa-McCain-Ross bill in his Washington Times Op-ed. Senator McCain’s announcement is particularly important in molding opinion on postal reform in Washington and nationwide for a couple of reasons. Senator McCain’s [...] Read more »

Postal Regulatory Commission Increases its Irrelevance in Policy Debate

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The Postal Regulatory Commission never seems to miss an opportunity to miss an opportunity. Yesterday in its Section 701 Report: Analysis of the Postal Accountability and Enhancement Act of 2006, the Commission combined a full throated defense of aggressive regulation, with some tepid suggestions for policy change. The report is neither in line with the current economics of the Postal market, nor the current political environment. As such it is likely to be ignored. The failure of the Commission’s report as an important policy document is gingerly explained by the Postal Service in its response. Improving the Postal Service’s financial stability in both the short-term and the long-term requires more [...] Read more »

David Nicklaus: Postal Service Needs a New Vision

Dave Nicklaus

In today’s St. Louis Post Dispatch, David Nicklaus nails the problems facing the Postal Service. Imagine a company that’s steadily losing customers, and it responds by telling its remaining customers they can expect worse service. That firm probably won’t stay in business long. Unless, of course, the business is the U.S. Postal Service. A wholly owned government operation isn’t about to disappear, but it can take a bad situation and make it worse. His solution for the Postal Service is a regulated public utility, free of Congress and much of current regulation. It also reflects the consensus view of economists and policy makers regarding postal policy. Mr. Nicklaus’s commentary does [...] Read more »

FedEx Comments on the Postal Service’s Problems

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The following are excerpts from today’s FedEx conference call that relate to its position as a contractor and customer of the Postal Service. The General Counsel’s statement suggests that FedEx is concerned about the Postal Service’s problems and how it could affect its financial prospects. The two analyst questions illustrate how FedEx competes and cooperates with the Postal Service From Chief Financial Officer Alan Graf’s opening statement: SmartPost average daily volume increased 29% to 1.4 million packages and yield was up 5%, all of which is attributed to higher fuel surcharges. The incredible industry-leading speed and reliability of the Ground network continues to win customers and deliver outstanding financial results. [...] Read more »

Why the USPS Matters: FedEx

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FedEx announced its first quarter earnings today and presented a downbeat view of economy and in particular its Express segment. The financial information presented continued to ilustrate that healthiest parts of FedEx’s business depend on its relationship with the Postal Servcie as a supplier or as a customer. FedEx as a Postal Service Supplier FedEx generates $1.373 billion in air freight revenue in FY 2010 from hauling mail by air in both daytime and nighttime air networks. This represented: 69% of FedEx Express’s domestic air-freight revenue; 6.49% of FedEx Express’s total revenue; and 3.95% of FedEx’s corporate revenue. As the largest chunk of the Postal Service’s use of FedEx’s air [...] Read more »

New USPS Service Standards: Effectively Slower Than Advertised

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The new Postal Service network generates most of the cost savings by shifting originating sortation until the next day and smoothing destination sortation and sequencing over more hours than is now the case. The Postal Service noted that this change will add a day to the service standard for First Class and Periodical Mail. However, changes in the time that mail is sorted may effectively add another day to the time it takes to deliver other classes as well. A previous post, Network Restructuring and First Class Presort Mail, noted that bulk mailers that the new network will require that mailers drop mail at the postal facilities accepting the mail [...] Read more »