This move directly impacts the Postal Services last-mile delivery business.
“Innovation is crucial when you consider the rise of e-commerce,” Dr. Michael Gorman, Niehaus Chair in Business Analytics and Operations at the University of Dayton, told Newsweek.
“Every single activity from the time you click ‘buy now’ until that package on your front step is tracked very precisely,” Gorman said. “It’s automated and optimized by using some analytics, leading to very efficient warehousing and delivery services.”
“The Post Office, on the other hand, has over 35,000 different locations, each of which has to be manned to transact with individual customers who walk in to buy stamps, letters or ship packages, each of a different shape and size,” he said. “There are more unknown variables here, which make it a tougher process.”
Author and postal expert Chris Shaw said that if the Postal Service were strictly a delivery service, these logistical differences would make it almost impossible to compete.
But he argues that the Post Office is much more than that.
“There’s a move away from the idea that the Postal Service is a public service, but that is why it exists,” Shaw said. “It is not a business, so taking too much of a business approach actually undermines the mission of the agency.”
He believes the biggest challenge the Post Office will face moving forward is retaining its public service mission while continuing to deliver the mail safely and on-time.
And what the Post Office delivers has changed dramatically in recent years.
“There are not as many things in your mailbox anymore, so USPS can’t cover the cost of that person who will come to your door and drop off mail every day,” he added.
And the pandemic increased the pressure on delivery services.
“COVID sped everything up when it came to package delivery,” Elaine Kamarck, director of the Center for Effective Public Management at the Brookings Institution, told Newsweek. “And it’s not clear that we’re going back to stores. If this is a permanent trend, then clearly the Post Office has to adapt its operations to that.”
Despite seeing revenue growth in its shipping services this year, the Postal Service is still trying to rebuild the trust it lost last year, after thousands of packages were delayed because of surging volumes and a lack of preparedness.
“There was a problem last year with delivery around the holidays where the mail was much slower than it has been anytime in recent history,’’ Shaw said. “That type of management was not something that is going to win people’s confidence.”
In an effort to respond effectively to the changing marketplace, the USPS has implemented its 10-year Delivering to America Plan, which includes investments in digital infrastructure, automated machinery and efficiency upgrades for their logistics networks.
But the primary focus remains on cost-cutting in order to offset $160 billion in predicted losses over the next decade and restore public trust in the country’s oldest federal institution.
The Post Office expects to handle more than 12 billion letters, cards and packages this holiday season. The Postmaster General insists he’s up to the task.
At last month’s Postal Service Board of Governors meeting, Louis Dejoy said, “I want to begin with three words — We are Ready!”
