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It will save USPS $2 billion annually

Many aspects of our lives have made a digital transformation over the last decade or so. We no longer rent physical movies from the video store; we watch them on Netflix or Hulu. We no longer get subscriptions for or pick up the daily newspaper; we read the news online. We don't run to the bank as often for daily finances; we jump on our smartphone, tablet or computer for online banking.

The U.S. Postal Service (USPS) is seeing these shifts in technology as well, but can't seem to keep up. Many letters, bills, etc. can now be sent electronically rather than through the mail. Hence, in an effort to save some serious money, USPS will no longer deliver mail on Saturdays starting August 1, 2013.

Cutting mail delivery down to five days per week will save USPS about $2 billion annually. For fiscal 2012, USPS saw a net loss of $15.9 billion (three times the loss record one year previous).

While mail delivery is getting axed, USPS plans to continue package delivery on Saturdays since this particular area has seen a 14 percent increase since 2010. Mail will also still be delivered to P.O. boxes six days per week as well.

In addition, post offices will remain open on Saturdays to allow customers to drop mail/packages off, access post office boxes or buy postage stamps -- although hours will likely be cut.


USPS is expected to give an official announcement today without explicit congressional approval. Lawmakers have said this approval is necessary for a change like cutting Saturday mail delivery, but the USPS is arguing this claim.

As far as the American people go, USPS expects some opposition from those like rural communities that worry a change in scheduling could make low-cost deliveries of items like medication a thing of the past, and publishers who will have to adjust schedules with publication deadlines.

Just last month, it was reported that USPS wanted to be more digital-friendly in order to keep up with the times. The agency is working on a digital platform called MyPost, which will allow customers to log in and view all packages that they'll be receiving as well as those they've already received instead of searching several different sites that the packages may be coming from.

However, Paul Vogel, president of digital solutions at USPS, revealed that his office is like "a San Jose startup," with only 15 Android/Apple developers, consultants coming and going, one computer and his BlackBerry smartphone. Technological restrictions make upgrading hard to come by.

A few other major obstacles are legislation needed to get permission for new digital products, the USPS' huge instruction manual for just handful of current products (adding digital products and security certifications would turn that 1,500 page book into something unimaginable), and USPS' losses of nearly $16 billion last year led to legislative proposals to keep making cuts (hence, more digital tech may not be in the cards right now).

Source: Boston Business Journal



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RE: It's about time......
By bah12 on 2/6/2013 11:07:07 AM , Rating: 2
Agreed, and another dramatic and misleading DT title as usual.

Although a overall loss of revenue is due to email/internet, elimination of Saturday deliver is not really related to that. Rather it is a step in making their process similar to their competitors. UPS and FEDEX don't deliver on Saturday without a hefty price increase. Congressionally forcing the USPS to do so is just one of many regulations that keep them from changing to be competitive.

There are several problems with the USPS, but not nearly as many of them are management related as people think. The vast majority of their failure to compete is Congressionally mandated.

The primary issue I think, is the mandate that they service every box daily. This gives their competitors a HUGE advantage. My postman drives by every house in the neighborhood every day, looking for little red flags. UPS/FEDEX don't drive by unless I call them first. As tiny as that may sound, it essentially insures that there is no way to service an area at the same cost as UPS/Fedex. It's a fundamental flaw, that cannot be overcame.

Couple this with one of the most ruthless unions, and pre-funding pensions/retirements, and there isn't a manager on the planet that can overcome those odds. So much so that it makes more sense to contract out transportation of the mail to your top competitor. Most people don't realize this but FEDEX is the USPS's #1 vendor. When you are paying your top competitor more than all other suppliers, simply because your own union'ed employees cannot be competitive, there is a serious g-damned problem.


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