Postal Service called slow to exploit IT

with one comment

My comments on this article are highlighted throughout.  What has been your experience?  Agree or disagree with my comments?  Comment this blog, or contact me directly…

Postal Service called slow to exploit IT

The cash-strapped U.S. Postal Service has fallen behind in generating revenue from new applications of information technology, such as switching to a FedEx-like tracking system, selling USPS data to mailers and charging local governments to issue various citizen identification credentials at post offices, says the agency’s independent regulator.

One of the biggest challenges in realizing benefits from IT has been how to expand the use of the so-called intelligent mail barcode — a series of lines printed on commercial letters and packages that computers scan to identify each parcel as it moves through the processing system. The tool also can measure the amount of time it takes to process items.

The Postal Service launched the labels in May 2009, and the Postal Regulatory Commission had expected mailers nationwide would be using them by 2012. But USPS officials now say they do not know when all companies will transition to the coding, and only about one-third of the nation’s mailers have adopted the IMB, mostly due to its cost, officials noted.

LMB comment – This highlights one of the major points of confusion, because of the way the USPS presents the Intelligent Mail information. The reference here is to an Intelligent Mail option – Full Service Intelligent Mail. Full Service Intelligent Mail is costly to implement, and to maintain. There is also risk involved.

“I think we’re all a bit frustrated that the IMB has taken much longer than we thought to be implemented,” said commission Chairwoman Ruth Goldway in an interview with Nextgov. “But we still see its potential . . . as a service that will give the Postal Service a vast array of data and control over the mail stream.”

LMB comment – I am in total agreement with Chariman Goldway here. There is a great deal of potential with the IMb. The USPS needs to work harder to understand the needs of mailers and mail owners so they can sell to that need.

USPS officials stressed that their technology is up and running and has the capacity to handle the nation’s commercial mail volume but that deployment is customer-driven. “If the measure of success is 100 percent [adoption], then that is unrealistic,” Thomas Day, USPS senior vice president of intelligent mail and address quality, said on Thursday.

LMB comment – What is the measure of success, then? And since the IMb will be mandatory in May 2011, the USPS should be looking at ways to encoureag customers to adopt Full Service. Obviously, the discount doesn’t come close to covering the costs involved. In order for businesses to make an investment into new technology and processes – good business, profitable business, that is – the business needs to be able to identify a return on investment. The USPS has had years to “sell” Full Service Intelligent Mail. Adding some tangible benefits for the majority of mailers would make that sale possible, and greatly increase the adoption rate. So far, the “benefits” touted by the USPS are negligible for the majority – resulting in a low adoption rate.

The Postal Service invested about $100 million to build the system, but its customers do not have enough resources to install new hardware and software that allows USPS to read their data, Day added. Currently, the information retrieved from scans does not always align with real-world times and locations, PRC officials said.

“To the extent we can’t process data, the errors are occurring on the side of our customers,” Day said. Recognizing this problem, the Postal Service recently spent $2 million on an upgrade to help customers troubleshoot glitches.

LMB comment –To say that all of the issues are customer issues is misguided and false. This attitude is detrimental to customer relations in the worst way. Mail service providers happen to be USPS customers too. Perhaps if the requirements were not so ridiculously complex, the mail service providers wouldn’t need assistance to troubleshoot problems. Perhaps if the customer issue reporting had been developed to be adequate to begin with, the USPS wouldn’t have had to invest $2 million dollars to “upgrade” their troubleshooting system. Perhaps if the USPS wasn’t so quick to react with monetary penalties for errors, the mailers would be more willing to give Full Service Intelligent Mail a try.

Day noted that, already, IMB is helping customers and the agency because the service easily corrects addresses and provides USPS with greater visibility into its supply chain. “With that volume of data, it gives us significantly more information about our [postal] network,” he said.

LMB comment – There is nothing easy about Full Service Address Corrections, either for the USPS or for customers. There are a great deal of complex rules and requirements that need to be followed, with only a tiny margin for errors.

Commission officials said radio frequency identification is a proven, smart-tracking tool that European mailers currently use to test delivery times, but USPS and its customers deemed the technology too expensive. RFID tags transmit location data over the airwaves to remote readers, eliminating the need for physical scanning.

The regulator now is not considering an alternative to IMB, though if deployment continues to drag on, it could ask USPS to develop other systems, perhaps RFID.

“The stick we potentially have is that every year we file a report with Congress letting them know whether the Postal Service is in compliance” with performance standards, Goldway said. “We could make findings that the Postal Service is out of compliance and go through a complaint process to get [USPS] to do something or highlight it for Congress and ask Congress to do something about it.”

USPS will file its annual compliance report to the commission by the end of December.

Day said that scrapping IMB for RFID would require the Postal Service to dole out hundreds of millions of dollars for an approach that even successful private-sector delivery services, such as UPS and FedEx, do not use for individual mail pieces.

The Postal Service’s other ideas for using IT to boost profits include leveraging an agency database that contains the official physical addresses of all Americans. Post offices already offer citizens the ability to apply for passports on behalf of the State Department, in return for passport acceptance fees.

There is some discussion of USPS linking its datasets to state or local computers to manufacture other credentials, such as voter identification cards — and recouping fees from those services. In addition, the Postal Service is thinking about selling some of its marketing, mail volume, transit time and certain IMB data to commercial mailers.

“I wish that these proposals were more developed than they are,” Goldway said.

The Postal Service is making progress and moving forward on each of these concepts, Day responded. But he suspects USPS will face pushback from the industry over the suggestion to monetize agency data because customers take the position “that it should all be free.”

LMB comment – This particular customer does not think “it should all be free”. My company utilizes the USPS OneCode Confirm program. This service allows mailers to track mailpieces. We don’t expect it to be free. In fact, we pay tens of thousands of dollars annually to access the information. However, general USPS information, such as mail volume trends and transit times SHOULD be available to everyone free of charge. And the USPS should recognize and utilize the value of that Confirm data, internally. They do not.

Despite its criticisms, the commission is pleased with the Postal Service’s strides in establishing partnerships with popular online services to attract more customers. For example, users of eBay and PayPal can print USPS postage from their desktops without paying additional fees or installing software. “They should be credited for being quite innovative within that field,” Goldway said.

LMB comment – Innovation is important. I personally utilize some of the online postage opportunities and find it easy and quick and most convenient to use. Simplification of Intelligent Mail requirements, mitigation of error penalties (there is a destructive focus on penalties as a revenue stream instead of a corrective action), and clear, quantifiable Intelligent Mail benefits are also key to the success or failure of the program. The USPS still has a ways to go in working to understand their customer needs and requirements. Once they do that, selling what we want to buy will be a no-brainer.

Written by Lisa.Bowes

October 29th, 2010 at 1:05 pm

Posted in USPS

One Response to 'Postal Service called slow to exploit IT'

Subscribe to comments with RSS or TrackBack to 'Postal Service called slow to exploit IT'.

  1. Liked your comments, Lisa. And agree that more work needs to be done regarding the needs and requirements–especially as it relates to full service address questions. Cynthia Williams at PBBI recently posed the question, Can there be too many address quality tools? Perhaps the USPS should be asking a similar question. (If interested in Cynthia’s take on this,
    http://postalupdates.pbbiblogs.com/2010/09/28/can-there-be-too-many-address-quality-tools/)

    Ed Gillespie

    2 Nov 10 at 9:37 am

Leave a Reply