OIG report: USPS needs to diversify and expand logistics offerings
A new report from the United States Postal Service (USPS) Office of Inspector General (OIG) has argued that the Postal Service “could better retain or even grow” its current package delivery business by taking steps to expand its logistics offerings. While conceding that USPS is “not a logistics company”, the OIG report said that “many aspects of the logistics industry are central to its core business”.
The report pointed out that USPS is operating in a changing environment and risks losing out to new competitors if it does not find way to capitalise more on its key strengths and use its infrastructure to deliver a broader range of services.
“The Postal Service is the dominant last-mile delivery provider in the United States because it visits nearly every address 6 days per week. As a result, no competitor can deliver small, low-revenue packages at such a low cost,” ,” said the OIG report.
“However, with competition for last-mile delivery intensifying in densely populated urban areas, the Postal Service may begin to lose significant market share to new entrants like crowdsourced delivery companies and regional carriers.
“As those competitors move into urban delivery, they could relegate the Postal Service to the role of making costly deliveries in rural or suburban areas with less density.
“Postal stakeholders and policymakers should note this potential urban-rural divide, as the Postal Service could end up being the only affordable way for Americans outside of urban areas to participate in ecommerce.
“In an era of declining and changing mail volumes, logistics may be one of the best options for posts and their partners to diversify their offerings and a key element of their long-term survival.
“Although the Postal Service is not a logistics company, many aspects of the logistics industry are central to its core business. By taking steps to expand its logistics offerings to the extent allowed under current law, the Postal Service could better retain or even grow its current package delivery business.
“In addition, by finding ways to leverage its existing resources and assets to provide or expand logistics services, the Postal Service could ensure that it best serves citizens and businesses and plays a valuable role in the quickly changing logistics industry.”
Click here to access a PDF of the full report.