In the words of Chinese philosopher Lao Tzu, “The journey of a thousand miles begins with one step.” There is one significant first step that those involved with shaping the vision of the future Postal Service need to take… and it has to do with how we look at the “miles” of the USPS’ operations.
Let’s think of the main categories of the things the United States Postal Service does as if they were independent businesses. For example, there is the “first-mile” business the USPS operates, which includes its retail presence, business mail acceptance, mail collection, etc. Then there is what is often referred to as the USPS’ “middle-mile” business, which includes transportation of mail/parcels between postal facilities, processing/sortation of mail and parcels within postal facilities, etc. The USPS’ “last-mile” business, which many say is its core strength, involves delivery to every address in the US, six to seven days per week, of mail and parcels as well as some collection of mail/parcels.
Now, let’s take the critical step that is often missing in discussions about what the postal system of the future should look like in the US. That step is to broaden our thinking – stop looking at the USPS in isolation and instead look at the USPS as one piece of a larger, complex, and interdependent supply chain.
The USPS Role in the Supply Chain
It’s crucial that decision-makers step back and look at the entire industry supply chain and how it could be better optimized with lower costs, better service, improved sustainability, and increased profits. Looking at a few examples of how that could work will help bring home the concept, and for the purposes of this article, let’s look at examples in the “middle mile” of the USPS’ business, though similar opportunities exist in the first- and last-mile business operations.
Today, the USPS transports mail and parcels between its facilities, in addition to picking up mail and parcels from customer plants. The USPS is often unable to optimize transportation, ending up with less than full trucks. Focusing on only the USPS transportation issues, a set of tactics could be developed that may lead to some improvements, but won’t do anything to address the transportation challenges of our collective supply chain. The mailing industry has built strong logistics and transportation capabilities around dropship entry of mail and parcels. Industry trucks go to and between postal facilities – the same facilities the USPS’ transportation moves between.
Transportation costs are on the rise for everyone, USPS and industry alike. Driver shortages leading to higher prices, fuel cost increases, and increased demand for transportation mean that everyone’s expenses will continue to go up… yet, if you look at the larger industry supply chain as a whole (including the USPS) there is redundancy, duplication of routes, and less than full truck loads. If one were able to look at a map of the US and see all the transportation routes (USPS and industry) and when trucks were not optimized, the enormous opportunities for better transportation utilization would be clear. Solutions and partnerships that better utilize the entire transportation system would help optimize truckloads, reduce costs and redundant routes, improve profits, and be environmentally positive.
And what would happen if we took yet another step back and looked beyond just our mailing industry supply chain, to include other industries utilizing similar transportation/logistics networks? In my imagination, the epitome of this concept is that all industries utilizing truck transportation join together to use the same network, combining loads, optimizing trucks, reducing redundancy, lowering costs, increasing profits, and, at the same time, having a positive impact on sustainability. But for now, we can start with the mailing industry as one supply chain that could work together in this manner.
Reinventing the Concept of Partnership
Similar opportunities exist in other parts of the “middle mile” of the USPS’ business. Today, the Postal Service operates hundreds of processing plants around the US. Yet there are thousands of mail service providers (MSPs) established across the US, and they have plants where they perform the same processing operations, often using the same equipment, as the USPS does. If you were to map out this MSP network compared to the USPS processing facility network, you would see considerable duplication in the locations of facilities, transportation between facilities, and capabilities. This MSP network not only has barcoding, sortation, processing, and transportation capabilities – it also represents a strong customer relations and sales force dedicated to keeping end business customers using the mail. For MSPs, keeping businesses using the mail is not just a sales goal; their livelihood and business existence depend on it. And MSPs have capabilities not yet being explored or fully utilized. For example, MSPs could sort mail differently for the USPS, reducing the number of sortations the USPS currently must perform in its plants to ready mail for delivery.
While this article has focused on just a couple “middle mile” opportunities within the larger supply chain, there are more, and there are similar types of opportunities in the “first mile” and “last mile” of the supply chain. But we need to step back and look at the larger total supply chain – not just the USPS portion of it – to see the opportunities that abound for public-private partnering or workshare. These solutions could allow us to reduce costs, optimize capabilities, improve service, and ultimately improve the mail user customer experience.
In 2017, three of the major industry associations – the National Association of Presort Mailers (NAPM), Idealliance, and the Association for Postal Commerce (PostCom) developed and published a 2018-2020 Mail Supply Chain Strategic Plan. These three associations regularly collaborate because they represent the network of US mail service providers, who are key entities within a very large and complex mailing industry supply chain. The total supply chain includes mail owners, mail and print service providers, software and hardware suppliers, logistics suppliers, and many more types of businesses involved in the processes supporting mailing, as well as the Postal Service.
The associations have met with USPS leadership about the collective strategic plan for the supply chain and are having discussions on how to integrate strategies to develop an optimized supply chain. They also plan to meet with those tasked with oversight and strategic direction of the Postal Service to share the message – that the journey of how we collectively look at these business “miles” in the future begins with the single step of broadening our view to encompass the total supply chain.
Kathleen J. Siviter is Asst. Executive Director of the National Association of Presort Mailers (NAPM) as well President of Postal Consulting Services Inc. (PCSi), and she has over 30 years’ experience in the postal industry. She has worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), and others, as well as providing consulting services to a diverse set of clients with interest in the postal industry. She also works with PostalVision 2020, an initiative designed to engage stakeholders in discussions about the future of the American postal system.
