mailboxes (Cynthia Chotvacs/Shutterstock.com)

GAO: USPS last-mile data useful, but unlikely to generate much revenue

As costs associated with mail delivery rise, the U.S. Postal Service is looking for ways to compensate with technology and data unrelated to postal services, according to a new report.

Costs related to USPS’s last-mile delivery network have increased to $21.1 billion in fiscal 2018 from $17.7 billion in fiscal 2008 -- a 19.4% increase that has resulted in losses of $69 billion, according to a December report by the Government Accountability Office. As a result, USPS has looked for innovative ways to offset that difference.

For instance, in 2018, a company worked with USPS on several pilot projects to collect data for road and pavement assessments by installing sensors on mail trucks. Although the USPS earned no revenue for its role, it is considering the concept of using its fleet for similar purposes in the future.

A bit longer ago -- in 2014 -- USPS participated in a pilot with the Defense Advanced Research Projects Agency in which mail carriers volunteered to carry radiological detectors and cell phone transmitters during normal deliveries. Those sensors gathered and transmitted data to DARPA, and USPS was reimbursed $39,219 for costs associated with the project. USPS, however, opted not to pursue additional pilots in 2015 out of concerns about public perception of privacy violations.

Several agencies currently use USPS address data for nonpostal purposes. Census, for example, gets biannual updates of several USPS address products to carry out surveys -- something the agency has come to rely on because “only USPS’s regularly updated address lists enable the Census Bureau to determine how long an address has been receiving mail,” the report states.

Obtaining address lists from commercial sources would likely cost millions of dollars annually, bureau officials told GAO.

The Department of Housing and Urban Development also relies on USPS address data. It buys quarterly updates of aggregated, anonymized address data to forecast and assess neighborhood changes. For instance, HUD used USPS data to assess the displacement of New Orleans residents after Hurricane Katrina, the report states, and HUD has used the information to make decisions about investment and development in Opportunity Zones and Neighborhood Stabilization Programs.

The Animal and Plant Health Inspection Service has been buying USPS change-of-address data since 2014 to ease the spread of migratory pests. Agency officials said they use the USPS records in a predictive risk model to find areas to target for outreach and pest-detection surveys.

Customs and Border Protection uses USPS data to monitor incoming international shipments as part of an effort to track importation of opioids. CBP uses data on the sender, recipient, contents as well as an identifier number to detect suspect shipments and request USPS stop targeted packages for inspection.

“USPS has considered leveraging its address data for additional revenue-generating efforts but is restricted in what it can make available and to whom,” the report states. The agency can, however, sell or license some address data products and services to commercial mailers. In fiscal 2018, revenue from such deals were $26.5 million.

The agency will continue to explore ways to adhere to privacy protections while also generating revenue through its data and physical fleets.

“If the goal of offering such nonpostal services is solely to generate net revenue, we identified only a few potential services with such potential, and those services are not likely to significantly improve USPS’s financial condition,” the report states.

About the Author

Stephanie Kanowitz is a freelance writer based in northern Virginia.

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