Digitization: Making the post office meaningful again

USPS executives see it as salvation for the service, but can anything make the post office relevant again?

Of all of the digitization projects in the industry, the most significant might be the one being tackled by the U.S. Postal Service. As an entity, the USPS is getting hit from all sides, with new technologies and competitors impinging on all the things we used to rely on the post office for.

Letter writing has already been usurped by email and texting. Online alternatives seem poised to kill off bill paying by mail. Junk mail, which kept the USPS solvent for years, is being undercut by much cheaper email spam. The catalogues that once weighed down postal carriers are now being distributed as PDFs. And packages, one of the few remaining USPS cash cows left, are getting beaten up by FedEx, UPS and other distribution systems, all of which offer far more detailed and accurate tracking systems.

Postal executives see digitization as their salvation. But can anything save the USPS at this stage?

James Cochrane, who until a few weeks ago was the USPS CIO and who now serves as the USPS chief marketing officer, argues that digitization can and will make the difference. First of all, the USPS is embedded in every neighborhood throughout the U.S. in a way that no one else comes close to. It commands a 617,000-person workforce and runs the largest civilian vehicle fleet in the world (more than 211,000 vehicles).

From Cochrane’s perspective, nothing can match that. USPS IT operations has a 38-petabyte database, managed by 3,000 different systems, 300,000 mobile devices — all of which are used to track more than 1.5 billion events every day. Not to mention protecting Santa Clause from the legal system.

For example, Cochrane’s boss, Postmaster General Megan Brennan, is preparing a program called Real Mail Notification. It will message consumers exactly when their mail will arrive and what will be in it. The idea: make mail delivery an event that people look forward to.

Cochrane argues that much of email is distracting and that, by comparison, the infinitely more constrained physical mail delivery is a relaxing breather.

“Can we enhance the value of mail? The speed of email is true, but email gets crowded. We’re inundated on the digital side. Being messaged this much is a bit overwhelming,” he said in a Computerworld interview. The mail offers a “more targeted and passive way of approaching consumers. You have that moment when you go through your mail.”

What about those digital ways of bill paying, promising greater convenience, speed and lower costs? Getting physical bills in the mail “is how customers still want to cut through all of that clutter. They are used to that routine of putting bills on their desk or however they pay that bill,” Cochrane said.

Also, the post office has always been about information distribution is as many varied ways as possible. The post office today still delivers some mail via mule (Grand Canyon), boat and hovercraft (Great Lakes) and snowmobile (Alaska). Those snowmobiles are themselves an advance. It was just 50 years ago that the USPS was using dog sleds for those same routes.

Other interesting postal details. Stamp Fulfillment Services, in Kansas City, Mo., is located in a limestone cave 150 feet underground. The idea is that it will keep stamps in better condition.

The same team that uses those mules is also evaluating flying drones. “Technology is evolving so rapidly at this point that I have a hard time projecting five years out,” Cochrane said.

Tracking is a challenge. Last week, I received a package that was using UPS to ship, but it ended with a last-mile handoff to USPS. The instant the package was in the USPS’s hands, tracking stopped. USPS did eventually send an update — hours after the package had been delivered, when I no longer cared about tracking. (To be fair, the email notification that USPS thought the package had arrived would have been a very welcome heads up had the package in fact not arrived.)

Much of the problem here is cost. USPS is by far the lowest-cost delivery agent. When it handles the last-mile deliveries, most companies deliver to the post office sealed crates containing a large number of individual packages. USPS doesn’t know which packages are included until later, as the deliveries happen. “The problem is the handoff. I can’t account for the fact that they choose to approach it this way and to not do the nesting,” Cochrane said.

And that mail tracking system the postmaster general is touting? It won’t be able to say which bills, checks or letters will be received. “Tracking every letter would require significant increases in postage,” he said.

Therein lies the core issue. Without abandoning its low-cost nature, it can’t match the delivery tracking of a FedEx, nor the speed or ultra-low-cost of email. Its only hope is to better the experience, to leverage the local workforce it commands. And to rely on American consumers not wanting to change their habits that much.

Between the army of employees and millions of people who hate change, this might just work.

Evan Schuman has covered IT issues for a lot longer than he'll ever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek and eWeek. Evan can be reached at eschuman@thecontentfirm.com and he can be followed at twitter.com/eschuman. Look for his column every other Tuesday.

Copyright © 2015 IDG Communications, Inc.

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