Making the Post Office Invisible

Making the Post Office Invisible


In July 2011, as a cost cutting measure, the U.S. Postal Service put together a list of 3,700 post offices that it wanted to close.

Like most organizations that have faced a full frontal assault by online automation and technology, the USPS has been working its way through a very uncomfortable transition.  They have no clear picture of what the service will look like 10 years from now.

Over the past five years alone, mail volume has fallen more than 20%, and revenue has declined 12%. According to the Cato Institute, a decade ago sorting 35,000 letters an hour required 70 employees. Today, only it takes two.

For this reason, the USPS has cut about 240,000 positions nationwide since 2000.

Between 2007 and 2011 it lost $25 billion, but its cash flow is getting worse. This year alone, the USPS has posted a net loss of $5.2 billion in the third quarter, and $11.6 billion loss so far for 2012.

So rather than doing a piece meal approach to cutting hours and closing post offices, a better approach may be to simply close all 32,000 of them. With this approach they would still perform the service, but eliminate their physical presence. This is what I refer to as “going invisible.” Let me explain.

First a Bit of History

In 1775 the Second Continental Congress made the decision to form a nation-wide postal delivery service and appointed Ben Franklin as the first Postmaster General. In 1792 it was elevated to a cabinet-level position.

The organization transitioned into its current form in 1971 under the Nixon-era Postal Reorganization Act.

Even with its declining base of employment, the USPS still employs over 574,000 workers and delivers 177 billion pieces of mail annually. It also operates the largest civilian vehicle fleet in the world with just over 218,000 vehicles.

The Current Business Model 

The USPS is in the business of selling postage. Even though it provides a number of other services, the vast majority of its revenue streams come from the sale of postage.

In a normal free enterprise business, postal rates would rise and fall according to market demand to stay competitive and remain profitable.

The Postal Reorganization Act signed by President Richard Nixon on August 12, 1970, replaced the cabinet-level Post Office Department with the independent United States Postal Service. The Act took effect on July 1, 1971.

In its current status of being a quasi-governmental agency, the organization has been given monopoly access to all residential mailboxes, but virtually none of the authority it needs to make it function as a business.

As New York Times columnist Joe Nocera recently argued, “the problem is that neither the management nor the workers really control the Postal Service. Even though the post office has been self-financed since the 1980s, it remains shackled by Congress, which simply can’t bring itself to allow the service to make its own decisions.”

Regardless of whether the USPS moves more towards a private or public entity, and good arguments can be made for both, its days of functioning as a headless, decisionless money pit are numbered.

Enter the Internet 

Delivery of First Class mail, which USPS has a legal monopoly on, peaked in 2001 and has declined 29% from 1998 to 2008, due primarily to the increasing use of email and other forms of online correspondence and business transactions.

FedEx and United Parcel Service (UPS) directly compete with USPS in the areas of express mail and package delivery services. However, both companies have transit agreements with USPS in which an item can be dropped off with either FedEx or UPS who will then provide shipment up to the destination post office, serving the intended recipient, where it will be transferred for delivery to the U.S. Mail destination, including PO Boxes.

While email may have lowered the volume of First Class mail, online retail has increased delivery volumes in areas where customers would have previously purchased items from local retailers. Approximately 40% of postal revenue today comes from online purchases or private retail partners like Wal-Mart, Staples, Office Depot, Walgreens, Sam’s, Costco, and grocery stores.

Australia's new automated postal stations

Going Invisible

Just as mail volume has dropped, foot traffic into local post offices has also plummeted. Once a focal point of community activity, people’s need to actually walk into a post office has been replaced with automated postal machines, online stamp sellers, contract postal units, and more.

Virtually everything that required a person to walk into a post office in the past either has or will be replaced by an automated machine, drop-off box, or remote service option in the near future.

By eliminating its customer facing-retail storefronts, where transaction costs are high and customer service is painful, the USPS can focus on what it does best, pickup and delivery.

As they makes this transition, they can also offload virtually all of its high dollar real estate where maintenance, upkeep, and parking are at a premium, and replace it with less onerous industrial space in cheaper, less-trafficked areas of the community.

Automated Delivery 

In much the same way homeowners cover the costs for specialty trash containers that match the semi-automated trash trucks on the road today, homeowners could easily be required to install next-generation mailboxes designed to work with automated postal pickup and delivery machines.

As we enter the era of driverless cars, a similar effort will focus on developing driverless delivery vehicles with automated mail delivery being the holy grails in this emerging industry.

In the late 1990s, I spent time working with David Porter, an ingenious inventor based in Kansas City who had developed and patented an automated delivery box he called SmartBox. As you can see from the photos, a delivery box like this can come in a variety of shapes and sizes, including something as subtle as a park bench with secured containers below the seat.

After spending several years trying to get industry leaders to take notice, David finally moved on to other ventures, resigning himself to the fact that he was a couple decades ahead of his time. However, given the chance, entrepreneurs are ready and eager to help delivery services adapt to the ever changing marketplace that our future holds.

Final Thoughts

The reason communities are fighting so hard to keep their post offices open is because they, as a community, are being singled out as “less important.” This never bodes well for political candidates who generally bear the brunt of this kind of regional complaint.

However, if all post offices were closed, it would be far more acceptable because everyone would be treated equally.

We will always need a system for delivering items. But is it better to deliver these items to a physical address or to us personally?

The average person in the US will move 16 times over the course of their lifetime, roughly once every five years. In any given year, approximately 20% of the population will change the place they call home.

While it is true that in some cases we want things delivered to a business at a specific location, such as parts for a manufacturing plant or books for a school, our current systems don’t allow for the separation of individuals and locations.

So, is it possible to create a technology for the U.S. Postal Service, FedEx, and UPS that will enable them to switch from static location-based addresses to dynamic, ever-changing personal addresses?

The starting and ending nodes of our connected world are often major disconnects. The efficiencies we have come to expect in the online world simply doesn’t translate well into our current systems in the off-line world.

So where do we go from here? What are the systems we need to create to solve these problems? Rest assured, the answer to these questions may very well be a critical new system that redefines our future.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything




10 Responses

  1. Tom,
    I lived with rurual delivery for 20 years. Astonishing consitent high quality. Snow did not deter them, even if it meant stepping across drifts to get to the box.
    … I can imagine an automated delivery system, but I wonder about accuracy when driving through a couple feet of snow and ice.
    — Unemployment is not all a matter of tech replacements. It is an ongoing invasion of our ways of life.
    (I’m sure you know the first application of the word “Computer.” It was a person who could add up sums of monies in banks, and sums of money owed to banks.” Sums that decide yes or no on scientific experiments. Just 70 years ago. As go the counters, so goes society.
    — Innovation finds ways to make humans unnecessary.
    … Question is whether innovation can find a durable use of human beings. Frankly, I doubt it. It is not in the best interests of computers (or whatever we may call them in a few decade).
    Back in ??? 1913? women got the vote in the United States.
    How long will it be before autmated systems get the vote?

  2. Tom

    The USPS is one of the better expenses of government money. Other essential government services, such as our military and public schools also operate at a financial loss. So what? Having a PO Box is convenient and a good security measure because no can see that I am out of town by the build up of mail in my letter box in front of my home, and no one can steal the mail out of my home letter box or vandalize it. 3 cheers for the USPS!!!

  3. I agree with Gary! I don’t see that automated delivery being a good solution (at this time) in rural areas of windy roads with lots of hills and valleys, especially in snow, ice and wet leaf covered roads. While I do agree that the larger offices with the sales counters can go, I don’t see that the technology is ready to replace all the human delivery personnel at this time, especially in the rural areas.

    I do think that David’s idea could work well in downtown areas to serve apartment buildings and condos and businesses. The buildings could install the “smart boxes” and each unit could have a “sub-box”. This would eliminate carriers in the urban areas and carriers would continue to be used to deliver to rural areas.

    I can also see changing over from the large physical postal offices with big manned sales counters and where humans “assist” the machines overnight in sorting (as they blast music, chat /text on mobile phones and talk to each other) in favor of fully automated sorting. Transition the large physical counter post offices into small automated sort centers with a small counter. Staff these with part time (no benefits) tech savvy types to keep the sorting machines running properly and who would also double as counter attendants for the bit of walk in traffic.

    One of the biggest costs to the USPS is their employees who are union. They get great paid benefits, earn nice salaries and cannot be let go until they do something *disastrous* at least 3 or4 times. By reducing the number of employees, the USPS can cut a big chunk of their current expenses and still provide the service people are used to. The biggest hurdle the USPS will have in downsizing or automating a chunk of their service is the unions. The unions are going to fight them tooth and nail every step of the way.

  4. Tom, I think you’ve nailed it in terms of where we’re inevitably headed with the postal service, but I also think the big bang approach to it is unrealistic. Our socio-economic system stands a better chance of being able to absorb painful layoffs in incremental fashion than it would an immediate loss of half a million jobs (or whatever large proportion of half a million that are unnecessary to maintain a fully automated postal service), regardless of the political and prolonged nature of the former. In either case, maybe we should send the willing among the casualties to the DaVinci Coders or similar programs? (only half-jokingly)

  5. admin


    Good thoughts here. But what if were announced that all post offices would close, and it would be a 10 year phasing out process? Suddenly people would stop objecting. The number of people needed to run the operation wouldn’t be substantially less unless the mail volume continues to drop. All of the personnel reductions could be handled through normal attrition.


  6. admin

    Gary and Amy,

    Automation is already working its way through the post office, primarily in the sorting process. Over time, automation will begin to creep into the delivery process, first in areas where its easy to automate, and eventually in rural areas like you suggest. This will likely take decades. At some point the ground based delivery systems will give way to flying drones. The flying drones will have less problem with ground conditions but will still need to contend with weather issues initially.

    The post office will be under constant pressure to do more with less, and since 90% of the expense is its personnel, it will be working to reduce staff everywhere it can… as soon as congress gets out of the way.


  7. Mark Coker

    Tom: Very insightful article. I for one am not anxious to give up my home delivery for a centralized/automated location; but then again most of what I pull from the mailbox is junkmail and goes straight to the recycle bin. It would be nice if the technology that supports a Smart Box would also notify me when something is delivered and more importantly, what the item is. Then I could remotely decide to accept the delivery or flag the item to be disposed of.

  8. Dennis Zekoff

    Tom: The USPS was profitable before the Bush Administration forced them to fund retirement pensions for the next 70 years. The Republican Congress wants to
    break the Post Office, so they can privatize deliveries
    to UPS & Fed Ex. Also, they won’t allow them to raise
    postage, and want to bust the carrier’s union. Save the
    Post Office!

  9. ChadB

    The usps distributes 100 BILLION pieces of JUNK mail each year. As long as they are losing money taxpayers are subsidizing corporate marketing. At minimum they should charge commercial interests an amount equal to their cost.

  10. Linda in L.A.

    I found your article while trying to figure out if I can drop off a prepaid return mailorder box ANYWHERE other than at the Post Office. Now that nearly every P.O. closes at 5pm, and the post office is trying to break the letter carriers union to cut costs, Congress has told us for “security reasons” we can’t put anything over 13 ounces into a box but instead have to drive it to a P.O. and “hand it to a postal employee”….at least that’s what the stupid counter worker tells me.

    I already buy my postage online, print the label, and try and leave it for my postman to pick up. The older letter carriers have seldom let me down. Can’t say the same for the counter workers, sorters, etc. What you describe will likely happen in time but I will be the sadder for the loss of what has been a first rate service most of my life. And I live in an urban center. Automation is no better here than in a rural setting.

    What you don’t really touch on is the loss of the personal touch that corrects the irritating “mistakes” the system will make. Like my problem right now, when the mail is misdelivered the consumer will have to spend hours trying to fix it. First searching online for the correctanswer to their problem, then when they ddon’t find the answer they have to look further for a REAL PERSON to contact. Like HP, Dell, and many other companies that used to have customer service, USPS will make it nearly impossible to find a real human being to explain what to do or to fix the problem. The consumer spends hours more trying to find out how to get the automaton to correct itself and will often just get so frustrated they give up. The next step is to look for a private company that does better service and quit using USPS. I know, I refuse to buy HP anymore because of their lack of respect for and service to their customers.

    So Hello Future, goodbye USPS. Anybody out there with truly superior postal skills? I foresee purchasing your service in the near future as UPS, FedEx, and the Post Office are not what they used to be and it’s just getting worse! Wish I could vote to spend my tax dollars on paying real people a decent wage to do a good job for me without fearing the CEOs will take so much profit out of the company at some point and cut benefits and salaries, thus giving us commensurate service to what the employees get for their work!

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