As USPS financial woes increase, it looks to foreign alternatives

Introduction

Faced with plummeting mail volume and record financial losses, the U.S. Postal Service is looking abroad for ideas. Foreign postal services in many industrialized nations have faced similar situations, but modernized their delivery and retail networks to remain financially sound.

A variety of services, like parcel pick-up at retail facilities and offering hybrid mail, a blend of digital and traditional mail, have increased choices for customers while reducing costs, according to a Government Accountability Office report. The GAO analyzed postal services in Australia, Canada, Finland, Germany, Sweden, and Switzerland.

Hybrid mail alerts customers with a text or e-mail when a letter is received, and allows the letter to be scanned and sent electronically to the recipient. Parcel pick-up at grocery or drug stores allowed postal services to cut costs by closing retail offices and offering longer hours in more convenient locations.

USPS has a retail infrastructure that it cannot afford to maintain. With 32,500 outlets, it has more locations than all of the six foreign nations combined. In 2010, the service reported a record $8.5 billion loss. USPS has asked Congress for more flexibility to change delivery frequency and expand access through kiosks and online services.

The GAO warned that changes at foreign postal services were planned 10 to 20 years in advance, and were initially met with resistance from stakeholders. “Congress and USPS urgently need to make critical decisions about actions USPS will take to restore its financial viability,” the report said.

FAST FACT: The volume of mail at USPS locations fell from 213 billion pieces in 2006, to 171 billion pieces in 2010, a 20 percent decrease. Some of the downturn has been attributed to the economic recession, but mail volume will continue to decline as electronic substitution of traditional, physical mail continues.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.

HEALTH CARE

• A special Medicare fraud task force is charging 111 defendants, including doctors, nurses, and health care company owners, with $225 million in false billing. The task force is a joint effort between the Department of Justice and Department of Health and Human Services. (Department of Justice)

MISC.

• City of Slidell, La., received $45 million for damages resulting from Hurricane Katrina. The Department of Homeland Security is questioning $472,205, from incorrect calculations of overtime, duplicate costs, and failing to use competitive contracts. (OIG DHS)