Wednesday, September 10, 2008

USPS tries alternative technologies…

We’re all feeling the pinch. Even the USPS predicts it will lose $2BB this year. “And if we don’t act, we’ll lose $2 billion more in 2009, too” Postmaster General John Potter said recently.

Operating revenue is down 2.4% from 2007, but expenses are up. Total mail volume is 5.5% lower than a year ago. And that’s just for starters.

You know that gas guzzler in your driveway? The USPS has 220,000 of them! Every 1-cent increase in gas costs the USPS $8 million. So USPS is turning to alternative transportation technologies to deliver the mail.

In a 2-year agreement with General Motors, the USPS will test a hydrogen fuel cell car in Irvine, CA. The ultra-quiet vehicle can unnerve the unsuspecting at first because it runs almost silently. But the operators have come to appreciate its smooth acceleration, and the cabin is comfortable. The USPS appreciates that it runs without one drop of oil-based fuel.

Dubbed the Equinox, this is V2 for GM. V1, while even quieter, lacked adequate space to carry mail. V1 also startled unwary pedestrians on several occasions because they couldn’t hear it coming. So V2 is a bit bigger and a bit noisier—deliberately to reduce the startle factor.

100+ GM fuel cell vehicles are on the road, mostly in LA, NY and DC where they are being tested the USPS, DOE (Department of Energy), Walt Disney and Virgin Atlantic. The largest limiting factor to wider acceptance of hydrogen vehicles is the fuel itself as there are only two public-access hydrogen pumps in the country—one in DC and one in LA.

The USPS is also turning to another alternative technology that is decidedly NOT limited access: YouTube. Using “Webisodes” to convince the hip public to rethink their shipping options, the USPS turns up the creative ingenuity to pitch its wares.

In the first 9-minute vignette, an office’s computers, shredders, Ethernet cables and other electronics come to life and begin revolting against the human office staff. A USPS letter carrier discovers he must deliver a package to triumph over the uppity machines.

Intrigued? Check out the series on YouTube and (No machines were hurt in the taping of this Webisode as they were recycled USPS stock.)

Speaking of YouTubers, is the younger set forsaking mail for text messaging and email? Maybe, but it’s probably not fatal for our industry, although electronic communication has definitely dented the USPS bottom line. Still, 56% say receiving mail is a pleasure, unlike the dread they feel confronting their email every day.

Among GenY-ers (born 1977-1994) and Gen X-ers (born 1965-1976), 70% read their mail immediately upon receipt and 66% read it weekly. 100% read letters from Grandma that might contain a check. (OK, I made that up, but it’s probably right, eh?)

They say they look to the mail to help make better buying decisions. They appreciate mail’s tangibility—they keep catalogs as references; they appreciate mail’s privacy factor—they see an advantage to NOT being able to forward private information to everyone in Facebook; and 68% say mail is more secure than email.

Surprisingly, 58% of the electronic generation prefer to receive and pay bills by mail.

So where is it heading for the USPS? Who knows.

The market is shifting quickly. You can’t blame the USPS for not trying something new.

No comments: