Modes of delivery

OIG report shows mode of delivery affects "customer engagement"

April 20, 2015

The USPS OIG has just released a new report on “Modes of Delivery and Customer Engagement with Advertising Mail.”  According to the report, which is based on a survey of 5,000 households, “Advertising mail delivered to a recipient’s door generates higher “read and response” rates than advertising mail delivered to the curbside or a neighborhood cluster box. Door delivery customers also are less likely to throw their ad mail away than customers with curb or cluster box delivery.”  The OIG notes that "Centralized delivery will lower Postal Service delivery costs, but could have implications on the demand side."  Read more.

Canada converts 100,000 customers to cluster boxes, only 4.9 million to go

October 24, 2014

Canada is getting cluster boxes, and lots of them.  This week Canada Post rolled out it plan to replace home delivery at the door to centralized delivery at a cluster box down the block.  Nearly 100,000 residences, plus over 3,300 businesses, have been converted so far.  Over the next five years, Canada Post hopes to switch a total of 5 million addresses from door delivery to what Canadians euphemistically call "community mailboxes" (CMBs).  Here in the U.S., they're just called Cluster Box Units (CBUs).  

Canada Post says it will save between $400 and $500 million a year by switching over to cluster boxes.  The savings will come from eliminating 6,000 to 8,000 jobs for the postal workers who walk the streets delivering mail to the door.  

But Canada Post has a long way to go.  The first wave of conversions represents just 2 percent of the goal of 5 million addresses, and there will be little to no savings during the early stages of the program, due to the cost of installing thousands and thousands of cluster box units at an average of $800 each.  (Canada Post outsourced the contract for manufacturing the units to a company in Kansas.)

The plan was first announced last December.  As discussed in a STPO piece, "Canada gets cluster-boxed: Why it can’t happen here," it didn't seem likely then that the USPS would follow Canada Post's example anytime soon.  It still doesn't seem likely.

There are just too many obstacles in the way of mass conversions, not the least of which is customer opposition.  The Postal Service has a policy of not converting customers without their permission, so there are basically three ways to increase centralized delivery: (1) require cluster boxes in new housing developments (customer permission not required); (2) ask for voluntary cooperation from businesses and residents; and (3) determine that the safety of the letter carrier can be ensured only by replacing door or curb delivery with a cluster box.

The Postal Service is using all of these methods to increase the use of cluster boxes, and over the past few years there’s been a steady stream of news articles about threatening dogs and bad road conditions leading to non-voluntary conversions, and about the residents of a new housing development, like this one in Pennsylvania, learning that the Postal Service won’t deliver to their curbside mailboxes and will require the developer to put in cluster boxes.

Despite these efforts, the mail continues to be delivered in much the same way as it has been.  According to a recent GAO report on Delivery Mode Conversions, voluntary conversions aren’t having much impact.  The USPS reported that in 2013, just over 43,000 out of about 5.6 million business door delivery points — or about 0.8 percent — were voluntarily converted to cluster boxes,  Just over 36,000 out of 32.2 million residential door delivery points — about 0.1 percent — were voluntarily converted to cluster boxes. 

Between 2008 and 2013, the number of addresses with cluster box delivery increased by 10 percent, but that was due largely to an overall increase in the number of delivery points.  In terms of total delivery points, the proportions have remained essentially the same over the past five years, as shown in this chart included in the GAO report:

Canada gets cluster-boxed: Why it can’t happen here

December 15, 2013

Canada Post announced this week that over the next five years it would be converting five million urban residences from door delivery to cluster box units (CBUs), also known euphemistically as Community Mailboxes (CMBs).  Along with other cost-cutting initiatives, like consolidating processing plants, closing post offices, and reducing employee benefits, the Canada plan will supposedly save $700 to $900 million a year and involve eliminating 6,000 to 8,000 jobs. 

The news that Canada would get cluster-boxed was greeted with applause by Congressman Darrell Issa, whose Postal Reform Act (H.R. 2748) mandates a similar conversion for the U.S., with some thirty million residences and businesses being required to shift to cluster boxes over the next ten years.  There’s a similar provision in the Senate bill (S. 1486), but it’s more moderate — it requires a conversion program but shifts customers only on a voluntary basis, with no target numbers.

The Postmaster General has also expressed interest in switching to more cluster boxes.  In January 2013, he said, “We’ll be looking at some centralized delivery, rolling that out across the country – no major push, but starting to move on that.”  

Over the past year, there have been many instances of customers getting converted to cluster boxes, often on a less-than-voluntary basis.  The Postal Service has been using a variety of explanations for making the conversions, like protecting letter carriers from unchained dogs, and it’s been sending out misleading letters to customers telling them they need to change modes of delivery when in fact they don’t.

A couple of weeks ago, the National Association of Letter Carriers put out a news release noting that it had “become aware of an effort by the Postal Service in different parts of the country to convince customers to agree to change their mode of delivery to cluster box or centralized delivery.”  In order to make sure carriers and customers know their rights, the announcement reviews all the regulations, which include a requirement that customers must agree voluntarily to a change in the mode of delivery.

Despite all the signs that the U.S. is trending toward more cluster boxes, we are a long way from mass conversions.  Many politicians and commentators will point to Canada as a model to be imitated and a harbinger of things to come, but the United States will see a mass conversion to cluster boxes at about the same time we get a Canadian-style healthcare system.  


Learning from Canada

Time Magazine has already come out with an editorial arguing that "we can learn something from Canada."  Time says that switching to cluster boxes is "an essential step for the post office to remain self-sustaining in a digital age.  For Americans there should be only one reaction: envy."  

Time puts the blame for the fact that we're not following the Canadian lead on Congress, which keeps the Postal Service tethered "like a dog on a leash."  

But Time has it wrong.  Current law permits the Postal Service to change a customer’s mode of delivery on its own.  Mass conversions don't require Congressional approval.  The reason our postal system hasn't resorted to this particular austerity move is that it's a terrible idea.  

The Postal Service has long recognized that there are many problems with changing over to cluster boxes, not the least of which is angering customers, especially if you do it without their permission.  As one person commented about the Canada Post announcement, "Nothing gets people more riled up than having something they are accustomed to taken from them by the government."

So while Canada may be ready to make the switch to cluster boxes, and while Congressman Issa and Time Magazine may be applauding the move, there’s not much chance that it will happen in this country anytime soon.  It’s one thing to introduce cluster boxes for new residences and businesses, but converting the mode of delivery for millions of existing customers is another story.  

The Postal Service delivers the last mile, almost: Changing modes of delivery

June 10, 2013

The Postal Service helps out FedEx and UPS by providing “last mile” delivery of their parcels, and two recent studies argue that the Postal Service should privatize its retail and mail processing networks and instead "concentrate on what it does best” — last mile delivery. 

But mail delivery ain't what it used to be.  More and more, the Postal Service is leaving the last stretch of the last mile to its customers. 

If you’re used to getting the mail delivered to your curbside mailbox, you can look forward to going down the block to pick up the mail at a cluster box unit.  If you get your mail at the door, you may need to put up a mailbox at the curb, or you too may be traveling to the nearest cluster box.  “Centralized delivery” is the wave of the future.

In January the Postmaster General announced that the Postal Service would be switching over to more centralized delivery points (i.e., cluster boxes) to improve delivery efficiency.   “We’ll be looking at some centralized delivery, rolling that out across the country – no major push, but starting to move on that,” said Donahoe.  The PMG said the expansion of centralized delivery would take time, but it would start this year.

“It’s an opportunity to save some money and also provide better service,” said the PMG, “especially with parcel lockers that we’ll be installing at the same time.”  That’s a reference to the Postal Service’s new “GoPost” automated parcel delivery lockers, as discussed in this excellent post on Going Postal.

The amount of money that could be saved by changing modes of delivery is considerable.  The Postal Service currently spends about $25 billion to deliver mail to more than 150 million homes and businesses.  The average annual costs for city delivery are $353 for door delivery, $224 for curbside, and about $160 for centralized.  For rural delivery, the costs are $278, $176, and $126, respectively.

A study on “Modes of Delivery” done by the USPS OIG showed that the Postal Service could save more than $4.5 billion a year by shifting 35 million homes and businesses from door-to-door to curbside.  It could save another $2.8 billion by shifting 52 million homes and businesses from curbside to a cluster boxes.  If the door-to-door delivery points were shifted to centralized instead of curbside, it would save another $2.2 billion. 

Congress seems ready to go along with the conversion plan.  Congressman Darrel Issa’s proposed legislation already has a provision pushing centralized delivery, and Senator Tom Carper says Issa’s idea to shift mail delivery from door delivery to cluster boxes may be included in some manner in the final bill.


A plan without a plan

For new residential developments, the Postal Service can use whatever mode of delivery it wants, and that usually means cluster boxes.  As a USPS spokesperson explains, “Where the builder used to have a choice on type of delivery, we’re choosing for them – or at least moving in that direction.”

The Postal Service is also looking to change the mode of delivery whenever it can.  As a postal spokesperson told Post & Parcel in late January, the first areas to experience a change to cluster boxes will be business parks, industrial buildings, and shopping malls where mail carriers currently go business-to-business to drop off mail. 

For residential neighborhoods, the Postal Service isn’t supposed to change the mode of delivery without the customer’s permission.  According to the “agreement clause” in section 631.6 of the Postal Service’s Postal Operations Manual, a customer's signature must be obtained before conversion from one mode of delivery to another.   

In April 2012, the Postal Service revised the POM to give itself more authority to determine the mode of delivery when adding new delivery points.  But the passage about the agreement clause is still in the POM, and there's nothing in the revised POM saying that the Postal Service can unilaterally convert the mode of delivery for existing addresses.  

Nonetheless, one postal manager in St. Louis recently sent a letter to the St. Louis Apartment Association (SLAA) stating the following: "The Postal Service has revised the POM giving the USPS the autonomy to make changes to current mode of delivery.  The Postal Service is not currently unilaterally changing any current modes of delivery.  But it now has the authority to do so."  

That manager may have it wrong about the POM, but his letter to the apartment association is another example of how the Postal Service is pushing current residences to convert to centralized delivery.  His letter says that the Postal Service will pay for conversion to cluster box units now, but owners who pass up the offer risk having to pay for it themselves later.

The Postal Service is also finding other ways to convert current delivery points to cheaper modes of delivery.  Under some circumstances, the Postal Service can change delivery for existing residences even without the owner's permission, like when the safety of letter carriers is a concern. The dangerous dog rationale for ending door-to-door delivery seems to be occurring with increasing frequency.

It's clear that the Postal Service is, as the PMG put it, “rolling out” more centralized delivery.  There’s obviously a plan behind all this, but the Postal Service has yet to file a request for an advisory opinion from the Postal Regulatory Commission.  Eventually, there will be so many news stories about delivery conversions that it will become clear that the Postal Service is making a change in service on a nationwide scale and it will have to submit a request for an advisory opinion.  In the meantime, the conversions are taking place on what is supposedly an ad-hoc basis, as if there were no plan in place.

In a previous post back in January, we noted several news reports about places where the mode of delivery was being changed.  Here are a dozen more.

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