Chapter 7: Creating the Digital Postal Network: Linking Customers, Carriers, and Correspondence to the Future of the Mail

Table of Contents

Although a more efficient and capable physical network and workforce will be critical for the Postal Service in the years ahead, these steps will not suffice to ensure the future of traditional mail services. The future of the mail will depend upon the ability of the Postal Service to develop a new fusion of traditional services and advanced information technologies, "a digital postal network." Successfully realized, a digital postal network will enhance the value of the mail as a 21st century communications mode and improve virtually every aspect of the nation’s postal service, from efficiency and security to the range and quality of customer choices.

Technology can therefore give back some of what it takes away. While many of the challenges before the Postal Service are technological in nature, the net financial risks posed by technology can be significantly ameliorated if the Postal Service is able to take advantage of the opportunities that technology offers. Although the Commission firmly believes that the Postal Service should remain focused on delivery of physical mail, it also believes that the Postal Service should take full advantage of the Internet and other technological advances to perfect value-added services that will better serve the needs of its customers.

A central feature of the digital postal network of the future will be "Intelligent Mail." Each piece of Intelligent Mail will carry a unique, machine-readable barcode (or other indicia) that will identify, at a minimum, the sender, the destination, and the class of mail. If successfully deployed, Intelligent Mail will allow the real-time tracking of individual mail pieces.

Ultimately, Intelligent Mail can serve a far broader purpose, functioning as the foundation of a truly digital network that links postal facilities, vehicles, partners and employees not only to each other, but also via the Internet to customers and to the individual mail pieces themselves. Through the deployment of a "universal language," Intelligent Mail may also allow dynamic real-time routing and other sophisticated applications. return to Table of contents

Deploying such a system will require significant investment and a strategic focus that must be sustained over time. But if successfully executed, the Postal Service will reap the rewards of its most significant opportunity today to increase the value and security of the mail while reducing costs and improving overall performance. return to Table of contents

The postal business has always been one of information transportation. As such, throughout history, it has been challenged to adapt to new technologies, from the telegraph, to the telephone, to the fax machine, to the rise of private overnight delivery services and, now, the Internet. However, no prior advance has offered so much opportunity to improve the value of the mail, to root out excess capacity and costs and—increasingly important—to enhance the security of the nation’s postal system.

The Postal Service is well aware that technology presents many opportunities. Beginning in the 1980’s, the Service began automating what was, at the time, an almost entirely manual and mechanized postal undertaking. Given that the Postal Service spends more than 75 cents of every dollar it earns on personnel-related costs, automation continues to hold significant cost-saving potential.

Technology that enhances coordination among the workforce also can play a key role. However, fundamental gaps exist in the infrastructure available in the field today, notably the fact that most mail carriers have no means of communicating with one another or with their local post offices while out on their routes.

Customers, too, feel the lack of a leading edge in information services. While some advanced capabilities are available on a limited basis, such as mail tracking, they tend be either focused exclusively on larger mailers or they are costly and rudimentary. Current barcode technology is limited in its reach and is not completely standardized, inhibiting the efficiency gains of a uniform approach. Current on-line postage printing options are cumbersome, expensive, and confusing to many individual users. True tracking is only available to larger mailers. So even where progress is occurring, too often the full benefits do not reach smaller businesses and individual customers. Making this truth even more troublesome is the fact that many of these same services are standard for all customers of private postal carriers, placing the Postal Service significantly behind the curve of not only technology adoption, but also of consumer expectations.

Much of this can be attributed to a rather piecemeal approach the Postal Service has taken in the past to the acquisition and deployment of technology.

Over the years, the Postal Service has incorporated technology  into its processes as it becomes available and affordable. However, these steps often lacked an over-arching strategy designed to maximize the benefits of these investments and enable rapid response to shifting market demands, mail volumes, and other current events.To begin addressing these issues in a more coordinated fashion, the Postal Service recently established the Mailing Technology Strategy Council to rationalize the Postal Service’s approach to its technology acquisitions and deployment. return to Table of contents

Traditional mail has little chance of competing directly with e-mail and its virtually free and instantaneous delivery. Rather than take a stand for traditional mail, the Postal Service should apply new technologies to make it smarter.

What are the advantages of physical mail? The nation is comfortable and familiar with it. Unlike e-mail, the internal contents of each piece can be readily categorized (i.e. bills, advertising, and personal letters are easy to differentiate). Because of its physical nature, it can be conveniently moved around. For example, magazines can go into the living room and mortgage bills can go to a home office for payment, then be transferred to a tax file. Why do people like e-mail? It’s free. It’s fast. It’s versatile. And, it is the mirror opposite of the physical mail stream: Large documents, photographs, bills, and correspondence all can fly back and forth without a single piece of paper changing hands.

• Enhance the services it makes available to consumers;

• Improve mail security by enhancing traceability;

Information such as sender identification, geographic origin, and mail class can be applied at the initial stage of the mail process and can be encoded by "smart" stamp vending machines or postage meters at the time of purchase. Then, once specific outgoing mail pieces enter the postal network, additional data (chiefly the destination and the date of processing the "postmark") could be added to the barcode by smart processing technology, making Intelligent Mail not only feasible, but highly unobtrusive, even for individual customers. return to Table of contents

The information-rich barcode that is the foundation of Intelligent Mail also has the potential to improve significantly the security of the nation’s mail stream, particularly if the Postal Service fully explores whether it is feasible to require every piece of mail to include sender identification, in order to better assure its traceability in the event of foul play. The events of September 11, 2001, and the subsequent anthrax attacks that exploited the nation’s mail system have raised significant concerns relating to the vulnerability of the nation’s relatively open postal network. In the weeks following the attacks, delivery of the mail slowed substantially, affecting all aspects of American life—from commerce to Congress. In addition to the many steps already taken by the Postal Service, the Commission believes that sender identification on all mail could further enhance the security and speed of the nation’s mail service.

Requiring all mail to identify its sender would likely have a negligible impact on most users of the Postal Service who readily identify themselves when they send mail and would consider such a requirement a relatively modest concession to ensure their safety and that of the men and women who deliver the nation’s mail. The greatest inconvenience, most certainly, would be to those who use the mail system for unlawful purposes, since such a move would hand law enforcement a powerful new tool to identify and prevent such abuse.

The Commission recommends that the Postal Service, in coordination with the Department of Homeland Security, study the development of sender-identification requirements for all mail. Issues of privacy should, of course, be noted and balanced with the value of enhanced safety. As a part of the study, the Postal Service should additionally explore the potential of technology to transition stamp purchasing equipment (e.g. vending machines, cash machines, self-service kiosks, post office counter sales, the Postal Service website, and postage meters) from the provision of general stamps to "personalized stamps" that automatically embed sender identification. return to Table of contents

Of course, the barcodes that can easily contain basic sender identification also have numerous commercial applications, as well, pointing to the possibility of new revenue streams for the Postal Service and an enhanced ability to meet and even exceed rising customer expectations.

Should individual customers require more complete information about their mail, tracking is available only at a very rudimentary level and only when customers pay for premium services, such as Priority Mail. As a result, if customers want to track a standard letter, rather than paying the current 37-cent price of a First-Class stamp, they must pay more than 10 times that amount to send the letter via Priority Mail, and they must pay an additional 45 cents for delivery confirmation. Even then, customers are notified only when the letter is placed in a recipient’s mailbox. There is no option to track its journey.