The US Postal Service hits troubled waters

postal_02061300001-4_3_rx512_c680x510We asked Zintro experts about their thoughts and viewpoints about the recent troubles plaguing the US Postal Service.

Zahir Uddin Arif, a marketing research fellow, says that the increasing use of email has dramatically declined the mailing of old-fashioned letters delivered by the US Postal Service, while competitive delivery companies like FedEx and United Parcel Service have squeezed the US Post Office’s business model. “Changed federal laws and labor agreements and the current financial crisis have restricted the agency’s ability to adapt,” he says. “The changes in labor costs amount to 80 percent of the service’s expenses, and current contracts contain a no-layoff provision.”

Arif points out that changes to the frequency of service or delivery areas require federal legislation. “Federal legislation should be compatible with the technology used by the USPS’s competitors. The proposed changes to the US Postal Service may draw broad opposition, and Congress should act carefully in eliminating Saturday delivery and post offices,” he says.

Glenn Lombino, an expert in international parcel delivery, thinks that the USPS must change everything about how it does business from the top down. “It must understand its place in the value chain as one of the most trusted companies in America and begin to offer electronic as well as hybrid type solutions. And, the USPS must be allowed to compete on price and charge accordingly,” he says.

Part of the problem is image. “The majority of the challenges the USPS faces today are due to the noncompetitive handcuffs the US government places upon it, as well as the monumental need to fund pensions while other large corporations generally skirt both of these issues. The media image of the USPS  is that it is unable to compete with the likes of FedEx or UPS and that it offers slower, less dynamic solutions. This could not be further from the truth,” says Lombino. “I challenge either FedEx or UPS to pick up a letter in Manhattan and deliver it to a residence 75 miles east of Seattle in 3-5 days and be limited to charging $0.45 for the letter. You could also get a discount on this price by co-mingling letters into a presort operation with very little service deterioration. If the USPS were allowed to competitively charge for services much like FedEx and UPS do, then perhaps they could compete and get back to doing what they do best: door to door residential delivery 6 days a week.”

By Maureen Aylward




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