Package delivery could be casualty of postal woes

But GAO report finds questions loom over savings

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Door-to-door deliveries for packages could become a thing of the past as the U.S. Postal Service looks for ways to cut costs — even as officials concede they don’t know if the cost etimates they are using are reliable.

USPS estimated that it costs roughly $380 annually per delivery point to deliver a package to a door. Other options are cheaper: only $240 to deliver it to the curb and just $170 for delivery to some commonly used central location.

The problem, however, is that the nation's mail service is using cost data from 1994, and although officials have attempted to adjust for inflation, the USPS estimate is probably out of date, said the Government Accountability Office.

The Postal Service has been trying to get businesses to voluntarily turn away from the costly to-door deliveries, but so far has only been able to convince 0.8 percent of the 5.6 million places they deliver to.

And investigators said the agency doesn’t want to make the switch mandatory.

“Large-scale mandatory conversions have the potential to achieve large savings,” the GAO said. “However, USPS is reluctant to mandate conversions.”

The congressional watchdog group said that “there is some evidence that USPS would face resistance from customers, USPS employees, and mailing industry stakeholders if it were to implement mandatory conversion of delivery to less costly modes.”

The Postal Service is considering funding a new study to update the 1994 data on delivery expenses. But a new study could cost between $100,000 and $750,000 — money the agency may not have to spare. 

Logistics and costs related to mail delivery are, unsurprisingly, the biggest expense that USPS bears, and reach about $30 billion annually, according to agency estimates.

 

 

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