USPS strives to mesh paper, electronic mailing options

USPS strives to mesh paper, electronic mailing options

'The goal is to make it easier for mailers to do business with us.'

By Merry Mayer

Special to GCN

Postal Service officials agree that the service must reinvent itself, possibly more than once, as new technologies make inroads into its markets.

The blueprint for that transformation is laid out in the Postal Service's five-year strategic plan. Released last month, the plan earmarks $2 billion for information technology expenditures.

The service has identified three possible future scenarios. In the best case, the service will see moderate growth in mail volume. The second scenario assumes electronic billing and payment alternatives will cause first-class mail volume to decline, beginning in 2003. In the worse case, electronic substitutes supplant not only billing mail but also ordinary communications and direct mail.

Based on these scenarios, the Postal Service likely will be forced to raise prices unless it finds new revenue sources, postal officials said. And, higher prices could decrease business further, they said.

'The business model is certainly threatened,' said Robert A.F. Reisner, the service's vice president of strategic planning. 'The whole point of the five-year plan is that we will face severe economic challenges ' if we don't allow the institution to evolve.'

High hurdles

Although postal officials see expanding technology services as critical, they also expect that strict regulatory constraints could be a barrier to offering new electronic services.

For any new service, the Postal Service must file a rate case and get approval by the Postal Board of Governors. The process generally takes 18 months and involves 83 people.

'It means millions of dollars of expenses [in litigation] just to try something new,' Reisner said. 'I don't want it to sound like we have no freedom,' but it is an enormous obstacle.

The service will spend $2 billion on systems over the next five years to improve efficiencies and reduce costs and to create new products and services that could help replace lost revenues, according to the five-year plan. The Postal Service is already running several pilots to help it meet its goals.

One possible new service is called Mailing Online. 'Businesses send a document to us online, and we'll do the printing and distribution. This is a good example of something we are trying,' Reisner said.

The service has also discovered a new market: small businesses that have not been able to afford direct-mail advertising.

'It is like the Walkman example. Who knew there was a market for Walkmans until someone asked, 'Would you like this?' ' Reisner said.

Another pilot, Delivery Confirm, lets mailers know a letter or package reached its destination, said Charles Bravo, the service's information platform vice president.

'We have been expanding this pilot pretty intensely over the past four or five months. Four hundred customers have signed up, and we are adding more each week,' he said.

There is also an Originating Confirm pilot. The service, for example, might notify the telephone company that you mailed your payment, negating the need for a second notice.

The Postal Service plans to roll out the two tracking services nationwide. During the pilot the services are free, but eventually there will be a fee, Bravo said.

Cutting costs and providing better service is another way the Postal Service hopes to survive. Most of the desired savings, some $700 million a year, are expected to follow increased use of technology.

One of the most important proposals is a full-scale tracking system. The service hopes to 'make the mail visible throughout our processes,' Bravo said.

Officials want to add a second bar code at the top of envelopes so mailers can include more information. The service already has 10,000 bar code readers in use at its facilities.

Double play

The additional bar code would be used in two ways: to provide mailers with status information about their mail and for internal use by the Postal Service.

The service expects that the bar code would help it process mail faster and more efficiently. Additionally, radio frequency identification tags would be attached to mail trays and containers so presorted mail items could be tracked throughout the process.

Also, there is ongoing work on a universal coding strategy so foreign mail could move easily through the system.

'The goal is to make it easier for mailers to do business with us,' Bravo said.

A core initiative is PostalOne, through which the service is sharing information electronically with 50 of the largest mailers'those that mail more than 7 billion pieces each year.

The service also is implementing a system that would provide real-time processing information to postal managers. It is testing the system, which it expects will let managers apply resources better, in Milwaukee.

On the transportation and delivery end of the process, the service has plans for two new systems: a Surface-Air Management System and a Delivery Operations Information System. The goal is to link these to the internal tracking systems so that delivery can be estimated within minutes, Bravo said.

The long-term strategy for better managing internal operations using IT seeks to capitalize on some of the end-user services launched recently, such as the electronic bill payment system eBillPay.

The Postal Service plans further similar projects. For instance, a mail recipient could scan a bar code on a document and go right to a Web page the sender has set up.

The service also wants to let individual mailers use personal identification numbers to access mail, for instance, at carousels that would be available around the clock.

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