Postal Sanity

Lately we witnessed some discussions about the possibility that USPS should or would downgrade to a five-day delivery service. The PRC estimated savings of $2.2 Billion per year by transitioning to a five-day delivery. And last year, the PRC looked at suspending service on Tuesday or Saturday.

Eliminating delivery on a day with light mail volume, such as Saturday or Tuesday, could save nearly $2 billion a year, the Postal Regulatory Commission, which oversees the agency, estimates.

According to a Gallup poll,  2 in 3 Americans don’t mind a five-day  delivery. Many suggested the elimination of Saturday delivery, since most businesses are closed that day.  DMNews stated that USPS plans to release its operational plan for transitioning to five-day-a-week delivery sometime this month. Joseph Corbett, the Postal Service’s CFO and EVP, told DMNews:

The Postal Service expects a receptive audience in Congress when it presents its five-day-delivery plan, which has addressed many of the concerns raised by customer groups. A majority of these came from a lack of understanding of what we want to do in the five-day environment. We have met with a number of customer groups and stakeholders and listened to their concerns. I think they are going to be quite impressed with the fairness of this plan.

CEP Observer forecasted that the implementation of the five-day-delivery service may take place around the second half of 2011. We finish this posting with some random thoughts about eliminating mail delivery on Saturday.

• Some mail items require the recipient’s signature. If all household members are working, it is difficult to collect this signature during the work week. In this case USPS leaves a “PS Form 3849″ behind, which allows to reschedule a delivery for  Saturday (USPS FAQ about Redelivery). With Saturday delivery gone, these consumers will have little choice but to gather their mail items at their local post office. The increase of customer traffic on Saturdays may be noticeable or not, somewhat depending on post office location and surrounding demographics.
• USPS offers a Parcel Return Service with free carrier pickup. This service is used by UPS, Fedex SmartPost and Newgistics to supply reverse logistics. If  carriers no longer pickup consumers return parcels on Saturday, then customers will have to drop their return shipment at the local post office. By the way,  Fedex SmartPost, UPS and others also collaborate with USPS providing the last mile delivery. Contractual issues may arise with USPS dropping Saturday delivery.
• Downsizing to 5 days requires more on-site storage space for the mail items. Most of the time this may not be a problem, since letters and flats volumes are down. But then there are the seasonal peaks in mail volumes, which may stretch storage capabilities to the limit. For parcels, storage may become an issue at BMCs and/or DUs.
• APWU President William Burrus stated:
  

  The APWU opposes the reduction in delivery days because we believe it would be the first step toward dismantling the Postal Service. Concurrent with the elimination of Saturday delivery would be the relaxation of the USPS monopoly on access to the mailbox. While Congress could pass legislation that would require the Postal Service to provide delivery only five days each week, lawmakers are unlikely to restrict the American public from receiving mail on the sixth day. If private-sector couriers are permitted to deliver mail on Saturday, they would continually press for expansion and the spiraling affect would be underway.

• Susan Pinter pointed out that retail mailers often have specific events, with specific in-home date goals. “If the USPS does eliminate mail on Saturdays, retailers will also need to change their event days. This is additional work for retailers that will affect their entire marketing strategies”. She believes that “a five-day delivery schedule will not have a huge impact on the direct mail catalog industry, but it will greatly impact the marketing campaigns for retailers”.