1. United States Postal Service
Sai Gajjala, Tim Huffman, Sarah Meadows, Bruce Wayne

2. Introduction Overview of the United States Postal Service (USPS)
Disruptors
USPS Response
Alternatives
Recommendation
Overview
Disruptors
Response
Alternatives
Recommendation

3. Overview
The United States Postal Service (USPS) is a government organization that was established in the early 1800s by Congress, and held to a Universal Service Obligation (USO), requiring it to deliver mail to U.S. residences six days a week. The USPS is regulated by Congress. The USPS is considered a private, government business and does not accept any tax revenue. All funds are received through business operations (e.g., paper mail, packages, office supplies, postage, passport and government documentation). The USPS delivers approximately 40% of the world’s mail. The USPS has $70 billion in operating expenses and has been operating at a loss since 2006.
Overview
Disruptors
Response
Alternatives
Recommendation

4. PESTEL ANALYSIS Political- Congress has been slow to react
Economical- Limited to US market
Social- Union presence creates limitations
Technological- Rapid communication and technological development (internet)
Ethical- Strong union resistance to operational changes (layoffs, job replacement)
Legal- congress influence on USO

5. SWOT Analysis Strengths Weaknesses Opportunities Threats
Large, well developed logistics network
Over 20,000 retail locations
Brand recognition
Outdated business model
Lots of Pensioners (Top Heavy)
Strong Unions
Opportunities
Threats
PO Boxes
Government Services
Profitable services
The Internet
Large Private Distributors
Overview
Disruptors
Response
Alternatives
Recommendation

6. Key Issues 4 strong employee unions
4,000 locations operating below $28,500 at a loss
Universal Service Obligation (USO) regulated by congress
Profitability skewed on different product and service offerings
Federal government is unable to provide more than 3 billion per year
Overview
Disruptors
Response
Alternatives
Recommendation

7. Disruptors
The USPS has been losing business because due to advancements in technology over the last couple decades:
Telephone
Fax machine
Smartphones & computers
Large distributors (e.g., Amazon, UPS, FedEx)
Overview
Disruptors
Response
Alternatives
Recommendation

8. USPS Response
The USPS attempted several response, which were all thwarted by their unions or Congress USO:
Partnership with Staples (office supply store)
Decrease delivery days from 6 to 5.
Tried to close locations, as opposed to changing infrastructure
Overview
Disruptors
Response
Alternatives
Recommendation

9. Recommendations AI & Autonomous Vehicles
Leverage technology for distribution
Partnerships
Partner with FedEx, UPS, Amazon, & Walmart
Innovation & Agile Operations
Make USPS leaner & more agile
Overview
Disruptors
Response
Alternatives
Recommendation

10. Alternative 1: AI & Autonomous Delivery
Benefits
AI and robotics have the potential to be responsible for a more efficient safer society
Autonomous vehicles are more likely to be utilized for delivery of goods
Drones have had pilot programs tested and recently approved for delivery by FAA
Drawbacks
Requires unprecedented investment but more sustainable for long term operations
Would create liabilities that exceed current limitations
Infrastructure & current legalities
Overview
Disruptors
Response
Alternatives
Recommendation

11. Alternative 2: Partnership
Benefits
Amazon has recently become the largest public company on earth
Synergistic with current workforce in regards to amount of employees bound by union pensions
Drawbacks
Creates reliance on a third party for revenue
Partners may require incentives for involvement
May limit the hiring of independent contractors and create stronger reliance on unions
Overview
Disruptors
Response
Alternatives
Recommendation

12. Recommended Plan: Innovation & Agile Operations
Pilot programs for the 4,000 locations operating at a loss
These locations become PO Box pickup for locations in given zones
Mail continues to be delivered for pick-up only at centralized locations
Distribution channels
Incorporate data findings for demonstration to congress about centralized mail services
Premium delivery option is
Overview
Disruptors
Response
Alternatives
Recommendation

13. Recommended Plan: Pilot Program
Dissolve the USO to decrease service obligation in favor of more modern business models. We propose petitioning congress by conducting a pilot program with our recommendations as a proof of concept:
Close 4,000 of the USPS’s lowest performing locations: $285 Million in savings.
Location will be enrolled in pilot program.
Pilot program overview:
Build more Post Office (PO) Boxes within the non-operational USPS locations.
Install self-service mail/package kiosks.
Reduce mail delivery to 5x per week.
Implement Premium Mail Subscription services.
Overview
Disruptors
Response
Alternatives
Recommendation

14. Premium Mail Subscription Services
Annual Rate
50 Million delivery points
150 Million delivery points
Pick-up Services
$50
$2,500M
$5,000M
$7,500M
Drop-off Services
Pick-up & drop-off Services
$75
$3,750M
$11,250M
Overview
Disruptors
Response
Alternatives
Recommendation

15. Financial Implications
Pilot program is a low cost solution
Increased profitability from new recommended pricing model.
Cost savings:
Limited delivery points
Leaner USPS store operation model
Overview
Disruptors
Response
Alternatives
Recommendation

16. Operational Implications
Freeze hiring
Age out some of the current workforce to reduce severance costs.
Offer buy-out option as incentive to leave: $5,000
Maximize PO Box establishment
Reduce pick-up locations
Invest in automated sorting processes: writing recognition
Overview
Disruptors
Response
Alternatives
Recommendation

17. Conclusion Overview of the United States Postal Service (USPS)
Disruptors
USPS Response
Alternatives
Recommendation
Overview
Disruptors
Response
Alternatives
Recommendation