The US Post Office’s Business Model

A week or so ago The Long Suffering Wife had to send back a couple of things she had gotten from two mail order places. The first one had a postage-paid sticker available for any needed returns. The merchandise to be returned got stuffed into a big envelope, the sticker attached, the package sent. No muss, no fuss.

The second package turned into a bit of a nightmare. They also had a sticker, but it wasn’t postage-paid. An identical big envelope got stuffed, I went to the post office to mail it. When I found a line of 20+ people with only two windows open, I chose to use the self-serve kiosk, four of which have been installed for the specific purpose of keeping people out of that line if all they have is something simple. Like buying stamps. Or weighing and sending a package.

I put the package on the scale, went through the straightforward touchscreen menu. What are you mailing it in? (They have pictures, this box, that box, your own box, this envelope, your own envelope, etc.) Is it hard or flexible? What zip code is it going to? Do you want extra insurance? Do you want the package to be signed for? Is there anything breakable? Is there anything dangerous (list given)? Do you want the $35 deliver tomorrow option, the $13 deliver in two days option, or the $6 deliver in three or four days option? (I’m rounding, but that’s the gist of it.) I picked the $6 option, got a sticker with postage and a bar code on it, attached it to the envelope, paid by credit card, and viola, it’s done.

Right? It seemed to be a straightforward menu system, simple, direct, no worries.

Until the package came back to us the next day with a handwritten yellow Post-It note saying that the postage should be $35, not $6. (Before you think that I picked the wrong option, consider that if I had, the machine would have charged me at that rate, not at the $6 rate, right?)

So today I’m off to see what can be done. Again there’s a line of 18 to 20 people, only two clerks, and I’m standing in line for over a half hour. At one point a third clerk comes out, but within seconds one of the two original clerks slaps up her “CLOSED” sign with a vengeance. I finally get to the front of the line and ask how I can cheaply send this merchandise, showing him the bar code and postage sticker I had bought last week.

Ah, I’m told that the blue envelopes are for the $35 Express Mail (one day) option, the red envelopes are for the $10 Priority Mail (two day) option. Or I could have used a Priority Mail Flat Rate box at $13 for a two day option. What about the $6 option that the machine in the lobby gave me? It doesn’t exist, I’m told. If that’s true, why are the machines in the lobby programmed to sell it? And if everything’s going by the computer scanning the bar codes to see what you paid, where it’s going, and what class of service, why does it matter at all what color the envelope is?

Whatever. Don’t engage, don’t argue. I just want to get out of here. The 25 to 30 people now standing in line want me to get out of here. (It was now lunch hour and the line had been growing behind me. And don’t say, “Well, don’t go at lunch hour!” I didn’t. I had been in the freakin’ line so long that it had BECOME the lunch hour.) The postal clerk gives me a red envelope to address and stuff, then he peels the old postage sticker off of the blue envelope and puts it on the red envelope. At least I won’t lose the $6 I paid last week. I pay the balance, he says everything’s great, and I FLEE the building.

Let’s compare and contrast that with, say, FedEx. Fed Ex has multiple envelopes and boxes that you can use, or you can use your own, they don’t care. With no line, from the comfort of your home, you fill out a form on the computer, pick your options, your service level (next day, two day, three day, etc), the weight, the address, etc. Anyone can get an account, so if you send things often the system will autofill your data and you can build an address book on the FedEx site for anyplace you send things to repeatedly. Then you can have them come to you to pick it up, or if it’s late in the day, you can drop it off at any one of about a zillion drop boxes. Granted, it’s a bit more expensive. The one day, two day, and three day options would cost $71, $37, and $13 respectively.

The important thing to note here is the bottom line. Fedex makes it simple and easy, if a bit pricier. The Post Office makes it confusing and time consuming, but you might save money if you must have next day or second day delivery. For three day delivery, the prices are pretty much identical, $12.95 for the Post Office and $12.86 for FedEx.

More importantly…

Fedex in 2010, 2011, and 2012 had net income (not gross revenue, net income) of $1.184 billion, $1.452 billion, and $2.032 billion respectively.

The US Post Office in 2010, 2011, and 2012 had losses of $8.5 billion, $5.1 billion, and $15.1 billion.

I’m sure you can google and find hundreds if not thousands of articles and analyses on how the Post Office got itself into this position. As a consumer who has to stand in the stinkin’ line and then get frustrated and confused by the system, I DON’T CARE. I just know that next time, for a three-day delivery, I’ll go straight to FedEx. For a two-day delivery, I’ll seriously think about spending $37 instead of $13 just so I don’t have to deal with the line and the frustration.

So here’s some free, common sense, business advice for the US Post Office:

1. Shorten the damn lines. Open more windows, have more people on during high traffic hours, something.
2. Make the automated kiosks actually have accurate information. When I pick this service to this address in this packaging and the machine says $6, don’t make me come back next week for it to be $10 after I stood in the damn line. (See #1.)
3. Why does it matter what color the envelope is? The computers are doing 99% of the work anyway, so I’m not really believing that it’s because some human along the way is going to get stuff mixed up. I understand that you can (and should) charge extra if it’s lumpy, it’s not flat, it’s in a box, it weighs a ton, and so on. No problem. But the blue envelope versus the red envelope thing? Give me a break.
4. Give your employees some flexibility and get some employees who care. Nothing’s more fun than thinking, “Thank God, there’s finally a third clerk!” only to have someone shut down at the crack of 12:00:00.01 because it’s lunch time, totally ignoring the line of pissed off customers that’s stretching out the door.

And then there’s trying to ship anything overseas and dealing with the customs forms. But that’s a rant for another day.