Government agencies remain a major source of income for the USPS but agencies could save money and benefit the Postal Service as well by taking fuller advantage of services such as mail presorting, an IG report said.
The report said that federal, state and local governments combined sent some 2.2 billion pieces of first class mail worth nearly $900 million to USPS in 2014, along with about $250 million worth of periodicals and standard mail. The report did not break out the federal government’s share of those totals among levels of government.
Postal management told the auditors that it is difficult to increase government mail revenue because of competitors’ pricing advantages in some cases, increased electronic dissemination of government information, and technological alternatives. It added that USPS has only a small portion of the federal government’s parcel business, largely because agencies generally operate under a GSA contract with private shippers.
“The Postal Service, however, can still play a key role in the future of government mail. Mail is an effective, low-cost, secure, and trusted way for government entities to conduct business and communicate with the public and program recipients. In addition, the Postal Service has a nationwide delivery infrastructure and is improving its operational performance,” the report said.
For example, we found only 72 percent of federal agency mail is presorted. “Mailing partners may be able to offer additional presorting services to lower the cost of government mailings. These partners could also offer more flexible payment options, such as paying after the service was provided. Factoring in mailing partners’ capabilities as part of Postal Service marketing efforts to government mailers could be mutually beneficial: it could help the Postal Service retain government mail revenue and government mailers could pay less postage,” it said.
