Since email became the communication norm and same-day delivery services like FedEx and UPS became more efficient, the United States Postal Service’s (USPS) profits have suffered from other companies’ use of technology. Now, the agency wants to use technology to their own advantage to minimize cost and win back customers by improving delivery times.
In an October 2 report, the Office of Inspector General of the United States Postal Service announced the introduction of Autonomous Vehicles (AV) in the next 5-10 years. While the mail truck drives itself from mailbox to mailbox, the letter carrier is more efficiently using his/her time to sort and deliver mail instead of driving. Besides increasing productivity, the technology is designed to increase driving safety and enhance route efficiency.
The USPS is already testing the technology which would also pick up more mail from the post office when new mail is ready to provide on-demand delivery. As the driverless technology becomes more trusted, accurate and cost effective, the USPS plans to integrate the vehicles into its “multi-year replacement of its vehicle fleet” according to the report. With nearly 215,000 fleet vehicles, the cost saving measures could have a substantial effect on one of the largest collection of civilian vehicles in the world.
Technology the agency plans to implement also includes enhanced AV trucking. Some trucks could be fully autonomous while others traveling together would use ‘platooning’ technology which increases fuel efficiency by controlling following distance.
Three specific technologies enabling autonomous vehicles include Artificial Intelligence to record and learn about human behavior and to make adjustments given that information, 3D maps which can be shared by numerous vehicles in real time, and Vision including radar, cameras, and lidar – Light Detection and Ranging – which uses beams of light bouncing off objects to judge proximity. AV technology should add between $7,000 - $10,000 in vehicle purchase price compared to regular gas-powered autos.
USPS Financial Challenges
USPS’ research and use of new technology comes at a precarious time. This year, the agency is on its tenth consecutive year of billion dollar losses – averaging around $5 billion per year with a high of $15.9 billion in losses for 2012. To address these losses, the agency has put several measures in place including the reduction of energy use in buildings – 31 percent in the last decade and including over 40,000 alternative fuel vehicles in its fleet.
In addition, the threat of closing offices that are under visited or overstaffed has been part of the USPS strategy for decades. In 2009, nearly 700 offices were being studied for closure with 11 from Colorado on that list. This came after 2008 losses of $2.8 billion. Though those 11 Colorado outlets are still operating, several other Colorado post offices have been shuttered over the years. This year, 3,700 post offices are being studied for closure along with other cost saving measures including reducing mail delivery days.
Because the USPS is an independent governmental agency, they receive no tax subsidy for their operations, neither do they pay federal taxes. As stated in the United States Code of Federal Regulations, Title 39, “Postal rates shall be established to apportion the costs of all postal operations to all users of the mail on a fair and equitable basis,” USPS should be able to balance its budget by charging necessary costs. However, that federal code also established the Postal Regulatory Commission to annually review the USPS performance report and consider their upcoming performance plan. Increases in shipping rates or the price of stamps can be approved by Congress. The code also dictates the USPS cannot raise prices by more than the rate of inflation without the commission’s approval. Discussions have been initiated between the commission and USPS to allow more autonomy for simple rate increases including the price of stamps. Finally, unlike other agencies, the USPS is required by Congress to pay for future retiree pensions in advance. Those costs take up between $5 billion and $6 billion every year.
Though the USPS delivers nearly 40 percent of all shipments for online services like Amazon, their private sector competitors including FedEx and UPS charge substantially more for shipping. Competitors’ pricing is so much higher that sometimes USPS is subcontracted for shipments. USPS rates charged to Amazon have been limited by the Regulatory Commission.
The commission is currently led by Republican Robert Taub along with two other Republicans appointed by Barack Obama and George Bush and one Democrat appointed by Obama. All four have been approved by the U.S. Senate.
Financial duress is common for postal agencies around the world. The U.S. trend in post office closures mimics a worldwide trend. Across Europe, of 29 countries studied only 8 had an increase the number of offices, according to news outlet, SwissInfo. The decrease in offices across the continent averaged 15 percent. For those countries that increased the number of offices, 5 had increases in the single digits. In France and the Netherlands, a national government subsidy funded the increase. Germany was an outlier, expanding offices by 85 percent by closing government owned offices and replacing them with privately run smaller outlets.
About the USPS
The USPS delivers more mail than any other public post office in the world, 47 percent of the world’s mail volume. In 2015, the agency had $68.8 billion in operating revenue and directly employed over 600,000 people. According to 2016 Postal Facts, if the USPS was a private company, it would “rank 43rd in the 2015 Fortune 500.”
The cost of a First Class letter increased from $.47 to $.49 in January and Priority Mail Express will increase 3.4 percent in 2017. International rates will not change in 2017. USPS online services through usps.com are offered in English, Spanish and Chinese.
Latinos featured on U.S. postage stamps include Cuban actor, Desi Arnaz, South American liberator Simón Bolivar, United Farm Workers of America founder César Chávez, and Rock and Roll star Ritchie Valens. This year, the USPS issued the ‘Delicioso’ series featuring Latino cuisine including tamales, flan, sancocho, empanadas, chile relleno, and ceviche.