Worksharing: The Building of Lasting Customer Relations

Posts around the world are beginning to wake up to the
fact that the dynamics that drive the postal business are
changing big-time.
The days when a post's statutory monopoly over the carriage of
mail was the defining characteristic of the nature of the postal
marketplace are practically gone. Today, posts find themselves in
the kind of competitive environment none would have
anticipated just one decade ago. Besides the onslaught electronic
communication alternatives, posts now find themselves locked in
mortal combat for market shares that are being lost to private
sector competitors within the express and package services end
of the business. Even a post's core over-the-counter retail
service is no longer sacrosanct. Just ask the customers who are
much more willing to buy retail postal services at Mailboxes, Etc.
(now, UPS Postal Stores) rather than suffer the lines at post
office counters.
The days of being able to take your customers' business
for granted are over as well.
Financial institutions are beating as rapid a path to electronic
alternatives to mail-based billing and payments. Periodical
publishers are testing the viability of electronic distribution, and
advertisers and marketers are dedicating increasing shares of
their business development budgets to media other than mail.
Is it any surprise, then, that one of the most asked questions at a
recent meeting of the Universal Postal Union was:
How can I increase the market appeal of my mail products
to win and keep the loyalty of direct marketers and
other businesses?
The trouble is that posts, when left to their own devices, are
incapable of discerning an answer to this question. Indeed, most
posts persist in the belief that if they tell the market the kinds of
services they offer that businesses will beat a path to their door.
What many fail to grasp is that in today's environment, the
question to ask is not "here's what I have; what do you want to
buy," but rather, "what do you need, and may I build it for you."
While no post is perfect, the U.S. Postal Service (USPS) benefits
enormously from an historical "accident" that more closely
linked marketplace interests with the development of postal
products and services. The link was what we call in the United
States "worksharing."
Simply put, worksharing is nothing more than the
substitution of more cost-efficient private sector resources
that otherwise would have to provide by less-efficient
governmental entities.
We call it worksharing; others might call it outsourcing. Either
way, it's the same. Find someone who can do the job for less,
and compensate him for his labors with a share of the avoided
costs.
Worksharing within the American postal market has been a
phenomenal success. It has provided businesses with a viable
method for diminishing the impact of seemingly endless postal
rate increases. It has created incentives for mail-using businesses
to prepare and present mail that is more efficient for the Postal
Service to handle. And it's also provided the kind of economic
stimulus that fostered the development of the kind of direct
mail marketing sector that is the envy of posts around the
world. Indeed, without worksharing, the U.S. Postal Service that
exists today would have fiscally collapsed long ago under the
burden of an infrastructure that is still one of world's most
labor-intensive and costly.
Worksharing in the U.S. takes many forms. American mailers
have proven their adeptness at mail presorting, mail bar-coding,
delivery point sequencing, palletizing, and drop shipping
(transporting) mail for destination-entry. While the many forms
of worksharing have added a certain complexity to postal rate
structures, it has allowed the Postal Service to avoid the
tremendous costs associated with the need to build more mail
processing facilities and with the need to expand the postal
workforce to more than a million persons nationwide. Without
worksharing, it has been noted, mail processing costs within the
U.S. would have increased by some 22 percent.
To many posts around the world, worksharing is still an
unknown phenomenon. If the desire, however, is to find new
ways to attract and keep businesses' loyalties, then those posts
had better begin to explore the business-developing
opportunities worksharing can provide.
Even within the U.S., the mailers' appetite for worksharing is far
from being satiated. Businesses are demanding that the USPS
respond much more aggressively to create expanded costreducing
worksharing opportunities and new product
developments. American businesses are calling on the Postal
Service (and the Congress that oversees it) to foster
opportunities to enhance mail's value and attractiveness by
making mail more "intelligent" through the use of devices such
as barcodes, RF devices, and comprehensive postal
informational infrastructure systems that would permit the
tracking and tracing of all mail at various unit-load levels.
…
For those who doubt the benefits of worksharing, I would
recommend they read a fairly recent paper published by the
Office of Rates, Analysis and Planning of the U.S. Postal Rate
Commission entitled "The Impact of Using Worksharing to
Liberalize a Postal Market." [A copy of that paper is available on
the Postal Rate Commission web site at
http://www.prc.gov/tsp/56/Wik.pdf. ]
In that paper, the authors noted that even though the U.S.
maintains one of the most stringent letter-mail monopolies, it
enjoys "the most liberalized postal market in the industrialized
world" because worksharing has put much of mail's "value
chain" into the hands of mailers and other third-party service
providers.
As the authors noted:
The most important impact of worksharing discounts on
[U.S. mail] volume has been in advertising mail. Since the
introduction of… [Worksharing], advertising mail volume has
grown 240 percent. Today, advertising mail accounts for 43
percent of total [U.S. mail] volume, 23 percent of revenue
and 21 percent of total contribution to institutional costs.
Direct mail has grown to be an important factor in the
United States advertising industry, commanding a market
share of about 20 percent. Households now receive more
advertising than…[other correspondence].
"Worksharing discounts," they noted, "proved to be a catalyst
for increasing volumes." Indeed, the advent of parcel drop
shipping opportunities have transformed the USPS' nearly
moribund parcel delivery service into an attractive, cost-efficient,
competitive alternative to the services offered by the lions of the
parcel delivery business.
In short, the only obstacles posts face in their abilities to
respond to the demands of a changing and more competitive
marketplace, are the obstacles they place on themselves.
Worksharing has proven a viable method for binding the
relationship between businesses and posts. The
opportunities are more than ripe for development.