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Innovation

Has the time come for digital mail delivery?

The good news is that the USPS managed to cut its greenhouse gas emissions 8 percent last year; the bad news is that agency is still expected to reach its borrowing limit this year.
Written by Heather Clancy, Contributor on

Even though the United States Postal Service (USPS) can't seem to shrink its financial losses, there is ONE thing that is has managed to reduce over the past 12 months -- its carbon dioxide emissions footprint.

The agency reported in the beginning of June (its first "official" report!) that it has managed to cut its greenhouse gas emissions by 8 percent since its fiscal year 2008 baseline measure. That's approximately 1.1 million metric tons of carbon dioxide, and it is just shy of halfway toward its 20 percent reduction goal by the year 2020.

One big factor has been a substantial cut in energy consumption at post offices (yes, there are many closing, so I am sure that it has some bearing) and mail processing centers. The emissions decrease related specifically to facilities-related energy use was 12 percent from fiscal year 2008 to fiscal year 2010, according to Tom Samra, vice president of facilities for the agency. Before that, between 2003 and 2008, the USPS managed to cut energy consumption by 29.4 percent, so I'm thinking it will take a lot more measures such as this one for the agency to erase the billions of dollars that it is losing each year. In the second quarter of fiscal year 2011 alone, the USPS lost $2.2 billion, although it also projects it will achieve cost savings of between $1.2 billion and $1.6 billion.

Some of those savings will come from cuts in energy consumption and fuel. In fiscal year 2010, the USPS realized an overall reduction of 9.5 percent in energy usage and fuel usage. It reduced metrics for transport, wastewater and solid waste by 7 percent. I already mentioned the greenhouse gas reduction goals; the agency also seeks to shrink energy consumption by 30 percent by 2015. More than 400 Lean Green Teams are working on additional energy reduction and resource conservation measures. The USPS is also now using more than 44,000 alternative "fuel-capable" vehicles and it is making a big push for "green mail" delivery. Aka 10,000 walking routes, 70 bicycle routes and 80,000 "park and loop" routes, where carriers drive to a neighborhood and then walk around to deliver the mail. (Mine own neighborhood is one of those loops.)

These numbers may be great, but we all know the USPS is in quite a predicament; its annual loss for this year is expected to reach $8.3 billion. It has been borrowing to stay afloat, but the limits of that debt will be reached this year, so no more borrowing. It has been squeezed by much more efficient rivals in the private sector and many of its rules of governance prevent it from taking action quickly to cut its costs or change its business practices. In a press release describing the most recent losses, Postmaster General Patrick Donahoe noted:

"The Postal Service continues to seek changes in the last to enable a more flexible and sustainable business model. We are committed to working with Congress and the administration to resolve these issues prior to the end of the fiscal year. The Post Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens."

This week, The Washington Post published an opinion piece about USPS reform suggesting many things, many of which really aren't a reality, though until the next round of worker negotiations in 2015. This phrase is very telling, though: "The USPS was created by the Postal Reorganization Act of 1970, when the iPad was still science fiction."

There are many things that the USPS has to fix, but one of its biggest challenges is cultural. That is, many businesses and individuals rely much less on sending first-class letters to get their message across. They've switched much of their correspondence to digital formats. Ironically, the sustainability measures of many companies -- which are trying to cut massive paper waste -- are absolutely one of the biggest factors hurting the USPS. Think of all the financial services companies and utility companies in your life that are moving to electronic billing and ask yourself how that will impact the USPS's bulk postage revenue in five years, 10 years. To be fair, the service still delivers upwards of 87.3 million pieces of mail each quarter right now, and I read somewhere there is probably 40 percent of the world's volume. But that volume is shrinking.

Some recent articles have called for the closure of pretty much every post office, but I prefer this piece from Bloomberg Businessweek, which examines the potential for digital mail delivery as a means of making the USPS much more cost-efficient. The article examines options for privatization, but what is more interesting is the coverage of what other countries have done to make their mail systems electronic. (Something that the U.S. has been reluctant to accept, apparently.) For example, Swiss Post lets customers either get their mailed delivered at home or scanned and delivered via an Internet-connected device. In Finland, you can send and receive from your computer; the service keeps an archive of mail for up to seven years.

In New Zealand, the postal service is working with Zumbox, which is one of the upstarts in the digital postal mail services game. The digital mail delivered by the Zumbox Platform is a secure facsimile of paper mail that you get from your electronic mailbox. Noted Zumbox CEO John Payne: "In recent months, we have seen many posts around the world accelerate rapidly from exploration towards commercial deployment, and we are thrilled to see New Zealand Post seeking to be a key player in digital postal mail delivery."

Zumbox cites a 2010 study by The Research Agency suggesting that 77 percent of consumers would like a digital mail option; a majority of them said they would opt out of receiving 59 percent of their current paper mail. Think about it: Birthday cards, wedding invitations, maybe some printed magazines and only the paper catalogs you want.

Will my parents-in-laws every receive their mail electronically? Nope, this is a cultural thing that will take years to work through the system. Then again, they might think digital if they had to go somewhere to pick up their mail every day because there was no longer federal support for a mail carrier's salary.

This post was originally published on Smartplanet.com

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