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More post offices in shops, urges GAO

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The Postal Service needs to modernize its retail network and should consider franchising more contract postal units as an effort to expand service areas, availability and profits, says the Government Accountability Office.

In a report (.pdf) published Nov. 14, GAO notes current USPS budget shortfalls have led to branch closures and shortened hours even ahead of the holiday shipping season, but says alternatives like third-party contract units can relieve some burdens.

These units reside inside of private businesses and are operated by those businesses' staff, but come with strict contract guidelines for products and services.

In fiscal 2011, USPS incurred $0.17 in costs for each dollar of revenue these contract units generated, says the report, but federal post offices had costs of $0.51 for every dollar of revenue.

In addition, although the number of these units declined by 15 percent over the course of 2007 to 2011, revenue they generated only dropped 9 percent, from $672 million to $611 million--whereas overall Postal Service revenue dropped by 22 percent during that time.

Third-party units also offer benefits for relieving branch workloads as well as expanding sales and services to customers, says the report. They are are, on average, open 54 hours per week, compared to 41 hours for post offices, and a larger percentage of contract units are open after 6 p.m. on weekdays and on Sundays.

More than 60 percent are located in urban areas where they can provide customers an alternative to the long lines of local post offices, says GAO.

The biggest concern USPS faces with these third-party units is that units can close at any time, such as when a business hosting the unit is sold or closed, and new partners are becoming harder to find, says the report.

GAO says that USPS must consider these and other alternative retail options as it currently explores new partnerships, reduces the hours of service at many post offices, and uses existing contract units to fill special needs.

For more:
- read the GAO report, GAO-13-41 (.pdf)

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