Can a better business model save 6-day delivery?

Everyone from the Government Accountability Office to the Postmaster General has argued that the Postal Service may need to cut six-day mail delivery back to five. The move would save the Postal Service some $2 billion to $3 billion a year. That’s a big deal for an organization that is saying it might be insolvent come October.

But today the head of the Postal Regulatory Commission argued otherwise. Ruth Goldway, who chairs the commission that oversees the Postal Service, took to task all the reports (and there are quite a few) that conclude the Postal Service needs to cut service as mail volumes wane. “An axiom in the business community is that a company cannot cut its way to success,” she told the House Committee on Oversight and Government Reform. “It has to have a real plan.”

What would that plan look like? Goldway has a list of about a dozen ideas, but the underlying theme is this: for years the Postal Service has been playing the volume game and it can no longer do that. Instead of continuing to focus on jamming as much as possible through its channel, the Postal Service needs to instead come up with new, higher-value products that people want to pay for.

Crazy-talk, right? Innovating your way to success. How novel.

One of Goldway’s ideas: better tracking systems in order to compete with products offered by FedEx and UPS. (She didn’t use those particular companies’ names, but I was able to read between the lines.) Another thought is rebranding the Postal Service to be a one-stop shop for government services. Get your passport, national park tickets and EZ Pass all in one convenient location. A third idea: build on the financial services already offered at post offices, like money orders, and position the Postal Service as a viable alternative to private check cashers and pay-day lenders.

It all has the makings of a great business-school case study.

Now, there are still plenty of problems that the Postal Service needs to address immediately, not with a 10-year plan. Like most other public bodies, the Postal Service is drowning in its retiree health-care and pension obligations. Goldway certainly acknowledges that some issues are imminent.

But at the same time, it’s refreshing to hear someone also talk about the longer-term picture and not simply write off the Postal Service for dead.

Small Dairies Go Under as Milk Prices Sink Again

PLAINFIELD, Vt. — The MacLaren brothers are third-generation dairy farmers, but they will likely be the last in their family.

After working all their lives on the hillside farm in Vermont that their grandfather bought in 1939, rising to milk cows at 3 a.m., even in blizzards and sub-zero temperatures, they decided to call it quits, auctioning off their roughly 200 cows and equipment ranging from stalls and hoof trimmers to tractors and steel pails.

The Term “Pink Collar” Is Silly And Outdated — Let’s Retire It

You can’t throw a stone around the internet today (if that’s even possible?) without running into the New York Times’ new study on so-called “pink-collar jobs.” The report found that over the last decade more and more men have flocked to traditionally female-dominated career fields like nursing and teaching. Fascinatingly, the study disproves the commonly held belief that this transition is the result of the recession, proving that men’s migration into the pink isn’t out of some alleged desperation. Men want those jobs.

deconstructiva

Barbara, thanks for your thoughts (and putting up with us swampers; not all of us are mean. No doubt Stephen is solemnly amused at his latest post – comments!). FedEx and UPS can’t cheaply ship a first class letter; that alone is a major PS advantage. I like the third idea. Banks need more competition; not everyone can access VC, etc. Credit unions help.
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Okay, the point already: expand idea #3 and emulate other countries where the Post Office is also a bank. No fancy derivative crap, exotic loans, or mortgages, just basic stuff like checking and savings for real people. Plus money orders, passport stuff, etc. as they offer now. One stop. Many poor people still don’t have checking accts. Let them go to the PO instead of a loan shark, I mean, check exchange “service”. Do you have more thoughts or links here? Thanks, Barbara.
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(and no, right-wing commenters, this “govt. intrusion” won’t shut down the banks. They still exist in Europe and elsewhere where PO’s offer basic banking. Sorry about that, Barbara, just trying to cut down on future trolling here.)
http://rodgermmitchell.wordpress.com Rodger Malcolm Mitchell

A good postal system is as vital to an economy as a good army. So why must the postal system be self supporting?

Do we ask the army to be self supporting? Must our Congress, our Supreme Court, the SEC, our national parks, our interstate highways, our border guards et al be self supporting? Why the postal system?

The federal government should support the postal system, and in doing so, make sure the service is excellent. Cutting postal service is for a banana republic, not for the United States.

Rodger Malcolm Mitchell
justmy02cents

Deconstructiva,

I cannot believe that you and I agree on this, it is past time to adopt some “B” school thinking into the moribund USPS.
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I suggest that they rewrite the benefits packages to be more realistic, change the pay structure to include incentives for speed and accuracy, implement technology, broaden the product base to address the glaring need for basic communication and financial services to lowest tier of Americans.
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Think of it USPS internet cafes, basic banking, basic video-conferencing, virtual offices….on and on and on…/
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change from 6 day per week to 24/7 operations and re-task the un-needed carriers to positions manning the USPS STORES.
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Time for some real American innovation and forward thinking.
justmy02cents

Rodger,

see @1.1

Time to move the USPS onto a trajectory of privatization and Profit…there is absolutely NO REASON why the USPS 2.0 cannot be self-supporting, profit-making while addressing glaring needs of a large part of the American polulation.
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You are correct …in that it CAN be an Expense item but there is really no reason why it CANNOT be competetive and generate revenue and profit.
http://erieangel.wordpress.com erieangel

I’m not sure cutting out Saturday delivery would greatly help the USPS. On the other hand, I’m not sure Saturday delivery is greatly needed by most people. Most of the people I know have post office boxes and the lobbies are open 24/7 so they can pick up their mail at their convenience, but they tend to do so only once a week anyway.
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That said, it would be good idea for Congress to allow the suspension of Saturday delivery for, oh say 3-6 months, see what happens. And during that time, they can also implement some of the other ideas. If I didn’t have a checking account, I’d rather take my check to the post office for cashing than a check cashing place. In fact, I’ve only gone to one of those places once; they wanted nearly $1100 to cash a $4,000 check. I took it to a cigar store I was told cashes checks and they did so for only $40.