The United States Postal Service is suffering dramatic losses due primarily to the electronic substitution for conventional mail and secondarily financial retirement burdens imposed by Congress. Its service offerings will soon be out of sync with digital communication trends and increasingly irrelevant to on-coming generations. This traditional postal business-operating model is clearly not sustainable. A confluence of 150 innovative business thinkers and postal influencers gathered in Arlington, Virginia June 15 to consider and craft a bold vision for the American postal ecosystem looking ahead to 2020.
Ursa Major Associates LLC, a strategic consultancy in the postal and parcel delivery value chain space, created and produced this initial event. Jeff Jarvis, renowned bussmachine.com blogger and author of the book What Would Google Do?, served as the conference moderator.
Federal Legislators Did Not Attend
The District of Columbia location was chosen specifically for its logistical convenience to Federal legislators, Postal regulators, and key USPS management in hopes they would attend this thought provoking one day dialogue. Unfortunately legislative hearings on the hill superseded priorities for all legislators and all but a handful of the targeted postal executives. Their absence did not dampen the frank and daring discussions of attendees in the least. The group consensus at day's end was to regather this fall and hang some muscle and meat on the new postal skeletal vision.
The Postal Reform Act of 2006 and the year long process of nationwide hearings with key stackholders, i.e., postal patrons, USPS management, postal labor unions, and Federal legislators came up with three dozen specific recommendations for change. All but a couple were rejected outright due to proprietary issues of one or more of the implementing parties, that is, Federal legislators, USPS management, and its work force.
Technology Partnering for USPS Holds Promise
There was some modest degree of rehashing these well documented positions by selective USPS presenters. However, the organizer and moderator with eager questioning and comments from the floor arrived at at least one potentially successful near term initiative. And that is the consideration of one or more joint ventures with private sector vendors with expertise in selective niche applications of digital communications. Obviously these would be "incubator" type projects to facilitate the quantifying and qualifying of various operational elements and issues.
This joint venture thought does not solve or even address basic strategic issues. However, the 2006 postal reform process clearly put strategic alternatives asunder. If even one joint venture product development initiative allows the integration of digital communication features to complement and supplement the analog mail services now in existence, progress would surely be acknowledged. And hope could spring eternal.
In his keynote presentation, The Age of Digital Disruption, Jeff Jarvis followed the theme of his book What Would Google Do? by suggesting that the audience in their strategic thinking mode consider this series of obnoxious assumptions and overstatements;
The letter dies … If it can be digital, it will be … Future is not analog to the past … First class disappears … Junk direct mail dies …
Jarvis opined that these are not problems but great opportunities. Entrepreneurs who seek efficiencies and savings for their clients will succeed. For example, Craigslist destroyed $13 billion in annual newspaper classified advertising all to the benefit of consumers. He concluded by saying, "Don't worry about how we got to where we are!"
Digital Mail Box Opportunity
Matt Swain, an Associate Director with InfoTrends, outlined the existing array of digital mailbox providers; DOXO, Volly (Pitney Bowes), Manilla, Zumbox (oldest in the USA since 2009), ePost (by Canadian Post), NetPost (in Finland with 12% of population signed up), and eBoks.dk (Denmark).
In a subsequent panel discussion on Digital Innovation and Alternatives Jennifer Tomlinson, Director of Growth and Strategy for Innovapost, which is 51% owned by Canada Post, explained that Denmark has the strongest digital infrastructure of any national postal service. Many Danish communities have agreed to accept physical mail only once a week because of the increased speed and reliability of their postal digital network and personal digital mailboxes. This would be consistent with InfoTrend's survey reported by Swain that 79% of consumers still want bills and statements sent physically by USPS. The actual information is received in Denmark in a much more timely fashion than available to consumers via USPS in the United States. And yet the hard copies for archival purposes are delivered several days later. This consolidation of physical mail for once a week delivery would be considerably less expensive than six days/week deliveries.
First introduced this past January, Manilla is designed to be a free, secure, personal account management service, a digital concierge if you will. In a live demo by Manilla CEO, George Kliavkoff, it is obvious that they have targeted the USPS' most profitable first class transaction document mail streams. It is launched with bills, finances, travel rewards and subscriptions, but designed to deliver data, documents & alerts/reminders for all personal account categories (medical, insurance, warranties, government docs, catalogs, etc.) There are easy (and secure) links back to websites to pay the bills or get more detailed background information on any single transaction. Remembering and processing myriad identifiers and passwords is no longer necessary.
Volly, owned by Pitney Bowes, has additional interesting digital mailbox features. This package was offered to the USPS management as a form of joint venture, but was turned down.
The Past is but Prologue
The current perception is that the USPS is rigid and can't change. Washington attorney and consultant specializing in the history and development of national and international postal law, James I. Campbell, Jr. offered an excellent context from which the gathering can look forward in considering the structure of a more responsive national postal service. At its outset from 1792 to the 1830s the U.S. Post Office was charged with distributing news as a means of building the first continental democracy. They did this by establishing rapid and reliable long distance transportation by means of "post roads," which included relay stations for the stagecoaches. This monopoly was lost to the new technology of the industrial revolution, steam-powered railroads and ships.
Delivery service innovations in the 1830s-1840s included cheaper faster national service by private express companies and city collection and delivery service by local express companies. The post office was given a national monopoly on the collection and delivery of letters in the mid nineteenth century. And yet the technology of telegraph (1840s) and telephone (1880s) provided erosion to what the post office hoped would be a communications monopoly. The car and airplane both improved the serviceability and economics of delivery in the 20th century.
The competitive emergence of FedEx and UPS in the 1970s virtually eliminated the USPS' dominance in fast paced parcel deliveries market. And this was concurrent with the huge USPS investment in the engineering redesign of their sectional centers to handle ever larger expectation of volumes of parcels, which never materialized but went to competition.
Implications for the Postal Service in the Digital Age
A Postal Service built on letters could be concerned about survival with a loss of letters. A government-directed post office is not well positioned to take advantage of technological advances as (1) new technologies have diverse consequences that cannot be anticipated by the government and (2) government decision-making is inevitably slower than competitive market forces.
Mr. Campbell concluded with "three policy choices based upon the actual history of the United States Postal Service; (1) wind up the Postal Service in an orderly manner, (2) extend the monopoly/privileges of the Postal Service into related fields, or (3) privatize and give the Postal Service a chance to adapt."
Since the near term priorities of our Federal legislators are not expected to include anything as drastic as these three policies, there seems to be a reasonable chance that the digital technology partnership offers discussed at this Postal Vision 2020 may stand the chance for additional consideration.
By Jasper Casey on Jun 29, 2011
How about privatizing the postal industry, and introducing some real competition into the mix? Look at how successful and innovative FedEx has been within the parcel industry. As long as the USPS continues to provide the inefficient, expensive, and poor customer service it currently does as a federalized monopoly it will continue to become irrelevant.
Competition will breathe innovative, cost-effectiveness, and relevancy back into the postal industry.
By p. long on Jun 29, 2011
another thing to keep in mind is that the Government's first priority is *not* making sure that mail of any kind is delivered; instead, it is usually whatever political end can be served using the USPS. this is not to say that Government cannot do good things (witness the successful subsidy of airlines with airmail early in the last century), but rather that any venture with which the Government is involved must be watched closely, especially when large amounts of money are involved.
By Pete Basiliere on Jun 29, 2011
The USPS' current problems boil down to this:
"It makes no sense to ship atoms when you can ship bits." - Nicholas Negroponte in Wired magazine, 8.1.94
I can't believe that I've been repeating this mantra for 17 years.
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