Technology Can Improve The Postal Service – If It Gets Its House In Order FirstFebruary 25, 2019
Picture this: a mailman drives to a house or a complex in a big ugly square truck, drops off mail, and leaves. This simple, commonplace scene has unfolded basically unchanged over the past 60 years in the United States, as foreign posts leverage new technologies to deliver a faster, more efficient mailing experience to consumers.
Despite the United States Postal Service’s (USPS) declining consumer satisfaction and persistently poor leadership, the agency can adapt to technologies embraced by foreign posts, but if, and only if, they crack down on waste and dysfunctional pricing policies. If USPS leadership can make significant inroads in saving the more than $3.3 billion in wasteful spending and underpricing identified in the recent Taxpayers Protection Alliance (TPA) report, the USPS can become a leader in next-generation delivery.
Deutsche Post is currently developing a technology called PostBot, which can help city mailmen transport heavy packages without requiring a truck (seen in this video). While PostBots are currently too expensive to be deployed on the streets of Germany’s main cities anytime soon, the Deutsche Post is prepared to hunker down and continue to develop this technology until costs fall enough for widespread deployment. This is a major step toward automation. But Germany’s main deliverer isn’t putting all of its eggs in the one precarious basket of driverless vehicles. Deutsche Post CEO is clear that completely autonomous delivery is a far-off pipe dream, predicting that, “Even in 20 or 30 years, we will still have people as parcel delivery.”
The German carrier’s model of innovation extends to mail delivery, a service line plagued worldwide by the rise of email and digital communications. Deutsche Post is currently piloting a program that allows the content of consumers’ mail to be scanned and emailed to consumers. This goes significantly farther than anything the US currently offers; USPS currently only scans the outside portion of letters as a part of its Informed Delivery program. Going the way of the Deutsche Post and integrating mail and email could go a long way toward stemming USPS colossal revenue losses. In the first quarter of fiscal year 2019, first-class mail volume “declined by $81 million, or 1.2 percent, on a volume decline of 428 million pieces, or 2.8 percent, compared to the same quarter last year.” Meanwhile, five-year mail revenue is down by more than $3 billion.
The USPS could begin testing and adapting promising foreign technologies, but first it must deal with the unique dysfunctions that paralyze the agency. Rolling out the scan and email service, for instance, would require that the USPS shore up its abysmal cybersecurity. In November, KrebsonSecurity reported that broken code in USPS’s Informed Delivery program allowed users to see any other user’s details — exposing the records of roughly 60 million individuals.
Normally, websites require that in order for users to retrieve sensitive information (i.e. phone numbers listed on an account), they go through multiple access points (or hurdles) in order to retrieve said information. Due to a lack of multiple access points, malicious individuals were able to gain and change personal user information through merely logging onto the victim’s online portal.
If the USPS cannot run Informed Delivery without basic, embarrassing cybersecurity mistakes, it surely cannot run a better, beefed-up version of Informed Delivery. In addition to more thorough cybersecurity efforts, USPS would need to get package pricing right in order to adapt some of the delivery technologies used in other countries. Currently, the USPS has a minimum cost attribution for packages of 8.8 percent, far below the actual percentage of wear-and-tear caused by package deliveries. According to the Postal Regulatory Commission’s Annual Compliance Review, packages made up around half of attributable delivery costs. This leads to the systemic underpricing of packages, making package-centric investments (trucks or hypothetical PostBots) far less lucrative than they should be.
In January, TPA found that flawed pricing, irregularities, and inefficiencies cost the agency more than $3.3 billion per year. These problems can be fixed by USPS leadership, in lieu of a Congress unwilling and unable to address Postal issues. With these savings, the USPS could increase capital investments in machines and methods that could save it further resources down the road. This is surely a far better path than continued stagnation and massive taxpayer-funded bailouts that have been proposed before. The USPS doesn’t have to embrace its Groundhog Day image of the same truck owned by the same lackluster agency. One of America’s favorite agencies can win back consumers and taxpayers by slashing waste and embracing game-changing technologies.
Ross Marchand is the director of policy for the Taxpayers Protection Alliance.