USPS "would save $4.5bn" eliminating door-to-door delivery

That was the suggestion of a new report issued by auditors at the Office of the Inspector General this month, who said that for the 35m addresses where doorstep deliveries are currently provided in the US, a switch to dropping off items at a kerbside mailbox would save USPS more than $4.5bn a year.

USPS could save a further $5.1bn a year by moving from delivery at kerbside mailboxes to centralised delivery points, the OIG report added.

Unlike the move to a five-day-per-week delivery schedule, which USPS believes would save it $3bn a year, the OIG said changing delivery points would not require approval from Congress, which is currently distracted from the plight of the Postal Service by broader problems with US debt levels.

“The Postal Service should develop a comprehensive strategic plan to aggressively move from existing door-to-door delivery to curbside delivery,” advised the report from OIG deputy assistant inspector general for mission operations Robert J. Batta.

“Future strategies should also evaluate savings opportunities associated with conversion of curbside to centralised delivery and mandate centralised delivery for new delivery points.”

Costs

With continuing declines in mail volumes eating into its revenues, the USPS has been trying to find new ways to cut its $24bn-a-year delivery costs, but so far has focused major efforts on getting US lawmakers to allow a five-day week.

Delivering items direct to the front door is the most expensive form of delivery, costing USPS $353 per delivery point in city areas, and adding up to a total $12bn each year.

By comparison, delivery to kerbside mailboxes costs $224 per delivery point in urban areas, while centralised delivery costs $160 per delivery point according to the OIG figures sourced from USPS delivery operations. The 52m kerbside delivery points cost the Postal Service $10bn a year.

OIG said kerbside delivery is more efficient because the carrier can remain in the delivery vehicle when dropping items off at individual addresses.

The auditors said according to their review, the Postal Service has converted only around 12,000 of 27m delivery points from door-to-door to kerbside delivery. However, USPS has been more successful in requiring centralised delivery points for new delivery points – 57% of new addresses in the 2009 fiscal year were assigned centralised delivery points.

The OIG report conceded that public opinion would not favour the changes to delivery access, and that changing to centralised delivery points would be “very difficult” because of potential public resistance.

It suggested that door-to-door delivery services could continue to be provided as a premium service.

“Unrealistic and unattainable”

USPS management told the OIG that it opposes elimination of door-to-door delivery, and instead aims to continue its focus on growing mail volumes while pursuing a move to five-day delivery.

USPS said the OIG’s research was based on “unrealistic” and “unattainable” estimates of impacts and cost savings.

Responding to the OIG report, USPS vice president of delivery Dean Granholm said changes being recommended would be “fundamental” to the USPS service and likely trigger public resistance.

“The USPS has long understood how protective customers are where home delivery is involved, and has extensive experience with congressional activity and special interest groups in this arena,” he said.

“Customers would rather lose a day of delivery service than have their mailbox moved from a door or kerbside location to a centralised delivery.”

Granholm added that the OIG report had not taken into account the full scope of legal and policy issues involved, nor the logistical challenges to changing the current delivery system.

About The Author

Ian Taylor

Ian Taylor is the Editor of Triangle’s Mail & Express Review Magazine and the www.postandparcel.info portal. Ian has been a business journalist for almost 30 years, editing and writing for a wide range of magazines and newspapers with a particular focus on the transport and logistics industries.

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