Postal Service needs centralized system to manage public-private partnerships

Wednesday - 7/3/2013, 2:54pm EDT

By Cogan Schneier
Special to Federal News Radio

The U.S. Postal Service has been broadening its use of public-private partnerships in recent years. But to fully leverage its relationship with the private sector, the agency could take a page from foreign post offices, according to postal auditors.

While the service is making progress on partnering with the private sector, the USPS still lacks a central office to deal with the logistics of sharing lessons learned, said Michael Kubayanda, a public policy specialist at the USPS Office of the Inspector General on In Depth with Francis Rose Monday.

"In regard to partnerships, other posts tend to be more aggressive in what they do with [private-public partnerships] . I think it is something where the Postal Service can catch up by learning from the aggressive actions that some of the European posts are taking, and that might apply to other areas as well," Kubayanda said.

USPS is partnering with the private sector to shift costs from fixed to variable to adapt to the worldwide decline of mail volume, stated a report issued last week.

The service has been working to cut costs in a time of financial troubles, and considered shutting down Saturday delivery service before Congress passed legislation banning five-day mail delivery in April.

Still, Kubayanda said USPS's public-private partnerships are saving the service money in multiple ways. Kubyanda explained that "coopetition" is a big factor in saving costs.

"'Coopetition' means engaging in partnerships with companies that might normally be your competitors, so for the Postal Service we obviously think of FedEx and UPS," Kubayanda said.

To eliminate costs, Kubayanda said USPS lets FedEx and the United Parcel Service, Inc. do the "middle mile" deliveries, delivering from city-to-city, while the service does "last mile" delivery, bringing mail to the final customer's home or business.

The National Academy of Public Administration recommended the "last mile" system in a March report. The report also suggested USPS study foreign postal service practices; other countries have eliminated door-to-door delivery to reduce costs.

The USPS report also noted the service's use of sale and leaseback agreements as valuable in a time of declining mail volume. In these agreements, USPS sells its extra facilities and then leases them until they are no longer useful.

"That way the Postal Service gets an immediate injection of cash, and is able to use the property as needed. On the other hand, it's not stuck with the property if it's no longer needed to provide services to the public," Kubayanda said.

The report said many opportunities like this exist for the Postal Service in real estate, and that creating a cohesive strategy will aid the service in a difficult financial time.

(Cogan Schneier is an intern for Federal News Radio)

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