New, experimental products vital to USPS future


The Postal Service should turn to non-traditional products to help future funding shortfalls but it will need congressional support, say reports from the agency's office of inspector general and the General Accountability Office.

In a Jan. 15 report (.pdf), the GAO says that nonpostal services--those not directly related to the delivery of mail, such as mobile tracking of packages--are an easy first step to address deepening financial problems.

In fiscal 2011, USPS reported net income of $141 million from its existing nonpostal services and products. It predicts it will make an additional $30 million in fiscal 2012 through products currently being tested, increasing to $120 million annually, says the GAO report.

These products include more detailed digital tracking receipts, barcodes that provide links to retail products when scanned by mobile devices, expanded direct mail marketing and websites, and mobile commerce services.

For some tested services, GAO says that the agency will need final congressional approval and legislation allowing it to expand into more competitive markets, either through expanding USPS authority or by easing restrictions in place under current law.

The USPS OIG report (.pdf) published Jan. 14 looks at the role the Postal Service could play in peer-to-peer commerce--web-based transactions where individuals sell and rent goods or property to each other.

Its report focuses on potential products like a digital USPS-verified identity and a collect on delivery service. The digital identity would show that businesses were vetted and shipments guaranteed by the USPS. Mail fraud statutes would likely be applicable to any transaction where a USPS digital identity is used, adding to consumer protection, says OIG.

The report does not specify a project cost or process for validating businesses or individuals before they are provided with a digital ID.

The digital COD service would see the Postal Service act as an intermediary and collect payment upon delivery for goods, and then transfer the payment to the seller through debit or credit cards, money order or via digital USPS currency, less a commission.

The agency's OIG says these new services would help it address changes in the market and meet future demands with new revenue streams, but does not say they would largely offset existing debt or near-term financial concerns.

These services may fall into categories that the GAO report identifies as needing congressional approval to develop.

For more:
- download the GAO report, GAO-13-216 (.pdf)
- download the Postal Service OIG report (.pdf)

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