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Digital SOS: How technology can save the USPS

Cindy Waxer | Dec. 9, 2014
Neither snow, nor rain, nor heat, nor gloom of night can compare with the challenges currently facing the United States Postal Service. Email continues to have a crippling effect on the centuries-old agency: The volume of first-class mail, or stamped mail, plummeted by 2.8 billion pieces in 2013.

Neither snow, nor rain, nor heat, nor gloom of night can compare with the challenges currently facing the United States Postal Service. Email continues to have a crippling effect on the centuries-old agency: The volume of first-class mail, or stamped mail, plummeted by 2.8 billion pieces in 2013.

A congressional mandate requiring the USPS to make regular payments into its future retirees' health benefits fund contributed to a staggering $5 billion net loss in the government's last fiscal year. And despite aggressive cost-cutting measures, like shuttering processing centers and slashing employee hours, 2013 still marked the Postal Service's seventh consecutive year of losses.

In the meantime, private-sector rivals like FedEx and UPS are luring customers away from the USPS's package delivery arm while sometimes relying on the beleaguered letter carrier for "last mile" delivery — the final, and typically most expensive, leg of a route. And tech darlings like Amazon, Google and taxi service startup Uber are pushing the envelope with plans for innovative new services such as 24/7 delivery lockers, weekend pickup points and even (maybe someday) drone deliveries.

Even consumers are putting mail carriers' Reebok-wearing feet to the fire. The Postal Service counts every single American as a customer and delivers 158 billion pieces of mail per year, but the agency is battling negative public perceptions about its future. In a 2013 InfoTrends survey, 75% of consumers rated the Postal Service as important or critical today. However, a mere 36% of respondents believed it will be important 10 years from now.

And then there's Congress. Since mandating prefunding of health benefits in 2006, lawmakers continue to exert heavy control over the USPS, kiboshing cost-saving proposals like cutting Saturday deliveries and closing post offices.

At the center of this perfect storm is James Cochrane, a straight-talking, mild-mannered, 40-year veteran of the USPS. Cochrane didn't cut his teeth in Silicon Valley or graduate from MIT. Rather, the Jersey City, N.J., native began as a postal clerk and gradually worked his way up to CIO, a position he accepted just over a year ago.

"I'm a nontraditional CIO," Cochrane admits. "I don't write code, and my background isn't IT." However, he does have something industry observers believe will help transform the ailing delivery service into a business intelligence behemoth: business smarts.

Unlike more traditional public-sector CIOs, Cochrane has a mind for marketing, not mainframes, and a greater appreciation for streamlined operations than fancy operating systems. And it's precisely this pragmatism that's helping him tackle new digital initiatives, forge competitive partnerships and redefine the agency's IT shop.

Wait a minute, Mr. Postman

At the top of Cochrane's agenda is redesigning the USPS mail tracking system by encoding as much information as possible on its letter and parcel bar codes. Central to this initiative is the agency's Intelligent Mail bar code (IMB) system, which uses Intelligent Mail scanning devices and more than 8,500 pieces of automated process and sorting equipment to scan bar codes for information that is then transmitted to a central database.

 

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