How To Fix the Post Office: Alternating Day Delivery & Community Lockers

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USPS-Post-Trucks-Parking-lotThe US Postal Service lost $5.6B in 2016.  Today the Liberal Canadian Federal Government announced that it would not reinstate home delivery of mail and all of the pundits cried… on both sides (see video at the bottom of this message). It is predicted that Canada Post will be loosing $700M per year in the near future.   These types of numbers are large enough that citizens just don’t understand them but rest assured, in the end, citizens are going to pay those bills, mostly through increased taxes.

Canada-Post-Trucks-Parking-lotThere are many idea’s about how to ‘fix’ the Post Office including:

  • Expand even more into parcels
  • Eliminate all door to door delivery, buy going to common ‘community mailboxes’ located near street corners instead
  • Use the spare small delivery trucks with a “second shift” at night to do “same day” delivery from companies like Amazon, Sobies and Walmart
  • Follow the UK example of selling off the Post Office to the private sector with guarantees of universal delivery at a set maximum (stamp) price

Those are all great ideas and should be pursued, but there are two other idea’s that we have never heard anyone else suggest, and I think most reasonable people will get behind.

You can balance any budget shortfall by cutting costs or expanding revenue:

1: Alternating Day Delivery

Most people, even older people do not get ‘real’ mail every day, so why are we paying to have it delivered every day?  Why not cut the number of delivery workers in half, delivering mail (to the door or box) on this schedule:

Week 1: Monday Wednesday Friday
Week 2: Tuesday Thursday

With virtually no practical decrease in service, the Post Office would be able to have massive staff cut (160,000 letter carriers the US, and 12,500 letter carriers in Canada) and 33% reduction their small truck fleet.

A rough estimate of the ANNUAL labor savings would be $8.1B (16000 x $51600) in the US and $625M (12500 x $50000) in Canada.

There would be some additional storage facility costs which would be much more than offset by the huge saving in the small truck fleet and maintenance.  The US is working through a $6.3B truck procurement right now and that does not include the enormous cost of fuel and maintenance.

Taking that number of vehicles off the road would also be great for the environment.

This one common sense cut alone would virtually wipe out the current deficits.  This would save the US and Canadian Federal Governments from paying for these shortfalls from tax revenue.  However, there is another option to EXPAND the post office and bring in more revenue.

2: Community Lockers

Amazon has already setup thousands of “Lockers” across the US and Canada.  Amazon and others have now figured out the that real cost in delivery in the “last mile”.  Shipping something all the way across a continent and then driving it to your neighborhood is relatively cheap on a per package basis because of large volumes. What is insanely expensive is getting that package from the end of your street to your house, because that is a volume of 1.

community-mail-boxCanada already has about half of its population receiving their mail through “Community Mailboxes” so why don’t the Postal Service’s leveraging and expanding their current Community infrastructure?  If you get your mail from a Community Mailbox now, you know that they have several box size compartments you receive parcels in.  There should be many more of those compartments and they should be made available to the private sector.

It is important for Governments to create a level playing field for business.  Governments can ‘rent’ those boxes to private sector companies like Amazon, Walmart, UPS, Purolator (which is already owned by Canada Post!).  This would allow smaller competitors (think Chapters or Barnes & Noble) to reduce their shipping costs and compete better with the big boys that would be driving this innovation.

The new/add-on Community boxes with many large compartments, would necessarily need to be more tamper resistant than the are today.  High value items could be delivered Community Mailboxes that are physically INSIDE a staffed post office building.  Both Canada and the us have many thousands of these structure that are often under used in rural towns.  Everyone in small towns fears hearing that their Post Office demand has dropped to the point that it is going to be closed; this would push some life into those structures.

Further, a mechanism for allowing both the delivery company AND consumers to gain access would need to be developed.  Cheap RFID’s that require no local power source and a smart phone app RFID reader would likely do the trick.

Of course this would not work for everyone, but if you order something online and are given a choice between free Community Mailbox delivery or a small ‘door to door’ fee (say $2), I will bet nearly everyone under the age of 60 (which is who is doing this type of shopping) would opt to walk 100 feet to their Community Locker.

Community Lockers should be considered immediately while alternating day delivery should be phased in to avoid a gush of unemployed.

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