With all the data being generated today as new and updated technology systems are implemented, the United States Postal Service could be on the cutting edge when it comes to visibility into its transportation network. That is certainly where it is heading, particularly under the current Postmaster General’s leadership with his background in private industry logistics and the strategies articulated in the Delivering for America plan, which includes the implementation of a state-of-the-art logistics ecosystem. Today, the USPS is working aggressively to update its transportation and logistics management systems so that it can leverage data to achieve transportation visibility in a way it never has before.
At the same time, there are key groups that are equally dependent on the USPS’s successful development of a transportation visibility system because they are in the business of transporting mail and parcels — the mailing industry that drop ships a significant volume of mail and parcels into the USPS’s network and the private transportation service providers that comprise the USPS’s surface transportation network.
While many readers are familiar with mailing industry transportation (e.g., drop ship, long haul, etc. of over 80% of the USPS’s Periodicals and Marketing Mail volume, not to mention a significant portion of USPS parcels), some may not be as familiar with how the USPS transports mail and parcels within its own network. That network largely depends on the use of private sector contracted transportation providers. These companies operate long-haul, middle-mile, and regional transportation contracts moving mail and parcels between postal facilities. And they have been a critical component of USPS operations for nearly 100 years. Many of those providers are members of the National Star Route Mail Contractors Association (NSRMCA), whose executive director, Greg Reed, has co-authored this article.
Visibility for All. Each of the stakeholders mentioned above — the USPS, its contracted transportation providers, and the mailing industry that provides logistics services for businesses sending mail or parcels through the Postal Service— has a need for transportation visibility. The USPS needs transportation visibility to better process and distribute inbound volumes and to manage its surface transportation network to ensure timely delivery. In turn, contract transportation providers (like NSRMCA’s members) need visibility to manage their fleets, maximize the utilization of their shipping capacity, ensure accurate payment, and quickly address issues that may disrupt operations. Finally, logistics providers for the mailing and parcel shipping industry also need transportation visibility to track shipments, provide customers with status updates, identify delays, manage their contracts, and balance efficiency and costs in utilizing the USPS network. And the mailers that utilize commercial industry transportation need visibility to better predict mail plans to achieve marketers’ desired in-home delivery window for omni- channel direct mail follow-up.
Many of these stakeholders already have transportation visibility systems in place, but integration between their respective systems remains challenging or non-existent. For example, a logistics provider to the mailing/shipping industry certainly uses some kind of load tracking mechanism, some based on real-time GPS data, but their systems do not integrate with the systems the USPS currently uses for things like making appointments to drop loads at USPS facilities (e.g., the FAST system). There is little if any provision of data or messaging capability between those providers and the USPS on the status of loads or details on what a load contains while it is in transit. That data-driven communication is essential given the dynamic nature of transportation where departure and arrival are constantly changing, which impacts the ability of logistics providers to access postal facilities and meet deadlines.
Similarly, many transportation providers that contract to the USPS have transportation management systems that provide visibility and help manage their respective fleets, but have yet to integrate with the USPS systems that monitor supplier performance, oversee payment for contracted services, or provide the USPS with important data on the status of loads in transit. The result has been discrepancies between the Postal Service and transportation companies over whether the supplier has met performance objectives, whether service was actually performed, accurate mileage being incorporated into contracts, and planning inefficiencies.
The transportation visibility system being deployed now by the USPS will address many of the challenges that currently frustrate the ability of the USPS to better manage its surface transportation network and the success of transportation providers. Ideally, it should also be able to support the needs of all stakeholders in the Postal Service ecosystem. But in order to achieve that degree of industry integration, a collaborative effort and commitment during the development and implementation stages is required.
Doing It Right Can Bring Significant Benefits. Working collaboratively to develop a system-wide solution for all stakeholders would unlock enormous benefits for the entire industry. With end-to-end visibility, the USPS could achieve significant operational improvements by being able to anticipate volume, manage facility access, plan processing, accurately order transportation, adjust transportation strategy to address disruptions, reduce transportation spend, fully utilize third-party and the USPS fleets, and provide precision tracking throughout the network — all in real time.
Transportation providers to the USPS would also significantly benefit. Network visibility would result in improved transparency of contractual expectations, timely and accurate payment for service, full utilization of transportation capacity, identification of opportunities to collaborate with other transportation providers to improve efficiency, and better strategic planning. That visibility would also create a foundation upon which additional innovations to USPS’s transportation strategy could be implemented.
Logistics providers and mailers would benefit from quicker unload times from a better appointment management system, ability to better monitor and react to unexpected issues while in transit, improved data and diagnostics to manage transportation, and the ability to identify strategic opportunities to provide a greater degree of end-to-end transportation solutions for both their customers and the USPS. Redundant and unnecessary transportation between transportation providers to the USPS and logistics providers to the mailing/shipping industry could be almost entirely eliminated.
An effective, integrated transportation management system is the key to unlocking the data that could drive transportation strategy and innovation. At its most simplistic level, an integrated system would enable the USPS to attract new suppliers with the understanding that inefficiencies — such as excessive dwell times or inaccurate schedules — would be removed from the system. At its best, an integrated system would empower the leading companies of today and tomorrow, powered by advanced data analytics and artificial intelligence, as well as two-way messaging capabilities, to achieve even greater efficiencies and profitability for the Postal Service ecosystem.
Collaboration Is Essential. In order for a transportation management system to bring benefits and provide viable solutions for all stakeholders, collaboration and pilot testing are essential. One such solution was pilot tested last year with mailing logistics providers and the USPS to better use technology such as real-time GPS data and electronic information exchange between drivers, logistics providers, and the USPS. This limited pilot test brought valuable insight both in terms of potential benefits as well as the need for an expanded pilot test that integrates with the USPS’s systems and includes USPS transportation providers.
An integrated system with end-to-end real-time visibility will allow the USPS to not only better manage transportation and the Postal Service supply chain today, it will also enable the USPS to make long-term data-driven strategic decisions that will ensure its continued relevance in the increasing competitive shipping industry. In the race for data, the USPS has willing and eager industry partners ready to support its mission and the Delivering for America strategy.
This article originally appeared in the November/December, 2022 issue of Mailing Systems Technology.