May 1, 2017 (RARC-WP-17-007)

  • After years of dwindling mail and booming e-commerce parcels volume, it is easy to overlook the mail business’ actual strategic relevance and financial sustainability.
  • The OIG and WIK-Consult found that mail still matters. In nearly all the posts analyzed it has remained a remarkably resilient and profitable line of business.
  • To maintain mail profitability, posts took advantage of flexible regulatory environments and government support which allowed them to raise prices and/or decrease their operating expenses.

For this study the OIG partnered with WIK-Consult (WIK), a consulting firm with expertise in international postal markets. In the first phase of the research 13 international posts were reviewed. Despite their differences, 11 of them reported, on average, a positive annual profit margin for mail from 2011-2015. In addition, mail generated over 60 percent of their total profits over the period. In fact, mail represented the single largest source of profits in eight of the 13 posts.

The second phase of the research consisted of analyzing the factors that drive mail profitability. The OIG drilled down into a subset of five posts: Australia Post, Belgium’s bpost, Germany’s Deutsche Post DHL, Swiss Post, and the United Kingdom’s Royal Mail. The best performers benefitted from three main factors:

Less restrictive legal and regulatory environments. Having the flexibility to raise prices as needed was crucial for profitability. Price increases have compensated in part for volume decreases. Flexibility was also seen in labor laws and pension regulations.

A common approach to cutting costs. Where allowed under national laws, the five posts reduced labor costs through workforce attrition, and two-tier wage and benefit systems. They also resorted to automation of mail processing, shrinking the number of post office locations, and streamlining of sorting and delivery— although with different timing and scope.

Government support. This support came in several forms, such as subsidies, debt relief, restructuring aids, tax credits, and transferring pension liabilities to the federal government.

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Comments (5)

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  • anon

    its 19 days passed that until now my package did not reach the destination. I reported this case how many times already and nobody cares what happened to my package. I hope they will take care of the problems before I file a case. I want my package back this time. My trucking no. is EH002494391US, there's also a case no. for this trucking.

    May 09, 2017
  • anon

    Hi Nerie, Thank you for your message. The OIG is an independent agency of the Postal Service which investigates and audits internal fraud, waste, and abuse; and day-to-day mail delivery issues are outside of our jurisdiction. If you have not already done so, please try contacting your local Post Office. If you have already done that, try contacting USPS Customer Service, (1 (800) 275-8777), or file an online complaint with Customer Service Very Respectfully, The USPS Office of Inspector General

    May 10, 2017
  • anon

    I sent my package since April 21, 2017, its almost 19 days passed and until now I never heard from the usps what happened to my package. until now, the package did not reach Malaysia the destination. are they just gonna keep quite or resolved the problem, I want my package back to me or I have to file a case against this problems. I hope somebody will look after this problems I want to hear from you soon if possible.

    May 09, 2017
  • anon

    Quiero reportar sobre la conducta impropia de un empleado postal y la destrucción de la correspondencia postal a gran escala.

    May 01, 2017
  • anon

    Gracias por su mensaje. Para su conveniencia puede completar su querella en nuestra página de internet a la Línea-Caliente. El link esta ahí arriba donde dice "Hotline form." Thank you for your message. For your convenience you can submit your complaint on our Hotline webpage. The link is above where it says "Hotline form."

    May 03, 2017

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Contributors

  • Jean Philippe Ducasse, Jessica Raines, and Paola Piscioneri contributed to this report.

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For questions, media inquiries, or to obtain more information regarding this report, please contact Agapi Doulaveris at 703-248-2286 or by email