Report: USPS Can Save $4.5B with Curbside Delivery

How could the cash-strapped U.S. Postal Service save at least $4.5 billion a year? By moving from door-to-door delivery to curbside delivery, according to a USPS Office of Inspector General self-initiated audit to review modes of delivery.

The July 7 OIG report recommends that the USPS develop a comprehensive plan to “aggressively move” from door-to-door delivery to curbside delivery. Further, the report says, the Postal Service should also evaluate savings opportunities by converting from curbside to centralized delivery and mandating centralized delivery for new delivery points

Centralized mail delivery via a “clustered” type mailbox including free-standing, pedestal-mounted or other cluster mailboxes mounted in a wall, kiosk or shelter, could save the USPS an additional $5.1 billion, the OIG report says. Not only would this strategic plan significantly reduce delivery costs, the report notes, it could be implemented internally through policy changes. And it would not require congressional approval—unlike moving from six-day to five-day delivery.

Is this a sound strategy for the USPS? Postal industry experts were mixed on the report’s conclusions.

“The cost of doorstop delivery is a nice thing, but a costly and unessential one,” says Gene Del Polito, the president of the Association for Postal Commerce. Centralized delivery (curbside or cluster box) is fast becoming the rule in new housing development areas, he says.

“We may be at a time when we need to expand these options across the board and reserve doorstop delivery for those willing to pay for the added service or those for whom other options may be a real hardship” such as disabled people, Del Polito notes.

The USPS, which lost $8.5 billion in fiscal 2010 and saw a decline of 6.2 billion mailpieces, is trying to reduce delivery operational costs of about $25 billion during the current fiscal year. So “everything should be on the table right now” that could reduce costs for the USPS, right-size the agency, and help maintain the long-term viability of the Postal Service, says Joe Schick, director of postal affairs for printer Quad/Graphics.

But Don Landis, vice president of postal affairs for catalog printer Arandell Corp., is skeptical of OIG findings, since the study was self-initiated without USPS input, and he doesn’t believe the plan would work.

“I am sure there would be cost savings if the three different forms of delivery could be realized,” Landis says. “But reality says this will never happen, due to not only the reluctance of individuals to move to different forms of delivery, but local ordinances that do not want cluster boxes or even curbside boxes.”