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If Postal Service Diversifies, It Can Deliver

Most of the U.S. Postal Service's plans for surviving in the short term come down to cutting costs and not implementing the new ideas its own consultants have called for.

When U.S. Postmaster General Patrick Donahoe told a Senate committee this week that the U.S. Postal Service had some pretty big bills coming up and no money to pay them, he really just updated an old story with new facts. The USPS has been pretty much in "check in the mail" mode for years, and the current liquidity crunch just caps years of declining volume (especially in the most profitable niches), greater competition on the delivery front and online, and higher operating costs.

To banish an estimated $20 billion shortfall by 2015, Donahoe asked the legislators to let the semi-governmental service operate — in some respects — more like a private business. Most of the actions he suggested fall into the category of cutting costs, especially in the realm of employee benefits. He also asked for permission to "determine delivery frequency," which is assumed to be code for ending Saturday delivery, and to "permit the streamlining of pricing and product development."

That last item reminds us of a report by the consulting firm Accenture, that Idea Lobby blogger Emily Badger wrote about early last year when the previous postmaster general trooped to Capitol Hill to deliver that year's satchel of grim financial tidings. The USPS-sponsored report, "Is Diversification The Answer to Mail Woes?" suggests some non-cutback options for the service.

Diversification, as Badger wrote, means doing just about anything other than processing the mail:

BY THE WAYWhen news breaks, this blog shows that Miller-McCune has the topic covered.

When news breaks, this blog shows that Miller-McCune has the topic covered.

"As it turns out, plenty of less perilous posts around the world are already doing just that. According to the Accenture study, 63 percent of the revenue of international posts in 2008 came from something other than the mail. And non-mail operations accounted for 100 percent of postal growth internationally from 2003 to 2008.

"Other postal services dabble in freight logistics and warehousing, processing licenses, selling phone cards, stationery and office products. Accenture arrays the possibilities among five categories: transportation, retail services, mail-related services (like digital mailbox management), emerging services (like telecommunications and e-commerce), and government services. Diversity isn't that foreign — other countries have or have had postal banks as the U.S. itself did until 1967."

In fairness, it's not as if the Postal Service doesn't talk about innovating (or pay for consultants to urge them to do so). And in a baby step, they do sell greeting cards at the post office next to the Miller-McCune HQ.

But like a hammer ineluctably drawn to nails, even when he addressed new ideas, Donahoe came back to traditional snail-mail concepts, like greater use of the flat rate box, mailing two ounces for the price of one, or helping prospective customers develop their own "unique mail pieces." When it came to online, besides redesigning the website, the most audacious proposal was, ahem, "to develop digital mail service solutions for today's wired world."

Sounds a day late and stamp short.

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