Sunday, November 17, 2013

A Post Office? Yeah, We've Got That.

Postal Service Counters Replace UPS Services at 82 Staples Locations;
Chain Offers Rewards on USPS Shipping Services

A new partnership between USPS and Staples Inc. offers a promising opportunity for the Postal Service to expand access to its services. A recently announced pilot program, the first such agreement under what USPS terms its Retail Partner Expansion Program, calls for the opening of 82 Contract Postal Units (CPUs) in Staples stores. If successful the program could be expanded to the remainder of Staples's 1,500+ domestic locations, and partnerships between USPS and other large retailers may soon follow. Contract Postal Units involve postal counters that are placed in, and operated by the employees of, other businesses. The operations offer most postal retail products, and do so at standard USPS prices.

Shrewsbury, MA: Staples #59 CPU:

The pilot's 82 locations are clustered in several markets: the San Francisco Bay area (with 29 CPUs); Atlanta (28 CPUs); Pittsburgh (16); San Diego (3); and Worcester, MA (6) -- near Staples's headquarters. The first CPUs opened mid-October, and as of November 15 all 82 are operational. The Postal Service provided Going Postal with a full list of all pilot locations and their respective opening dates. The list can be found at the end of this article.

USPS and Staples held ribbon-cutting ceremonies in various markets to celebrate the pilot venture. At the CPU ribbon-cutting ceremony in Shrewsbury, MA, Staples District Manager Steve Lemieux -- whose father was a Postmaster -- predicted that the new program would be highly effective at serving its small business customers' needs. Mr. Lemieux stated that Staples is always looking to provide the "best value for its customers" and that the USPS counters would help the store "take care of their needs and get them back to their jobs." At the same event USPS's Greater Boston District Manager Charles Lynch declared that the Postal Service had "great expectations" for the project. USPS media releases declare that the program was designed to provide "convenience and options to customers." Reached via email, Postal Service spokeswoman Darleen Reid called the program "win-win for all parties: USPS, Staples, and our customers."

The two organizations will initiate a joint television advertising campaign in the program's test markets beginning November 18. Going Postal has been informed that the program will also be supported with Direct Mail mailings to customers in these areas.

The pilot program ends September 30, 2014, at which point the program will be evaluated and may be expanded or discontinued.

In addition to its network of nearly 32,000 post offices, USPS manages about 3,500 CPUs, most of which are located in locally owned businesses such as pharmacies and gas stations. The Postal Service has previously attempted, though not succeeded with, large-scale Contract Postal Unit programs with national retailers: Sears, Hallmark and (before the chain was bought out by UPS) Mail Boxes Etc. The arrangement with Staples represents USPS's first CPU partnership with a national chain in nearly a decade. This program appears more likely to succeed than its predecessors; USPS's arrangement with Staples appears to be better conceived, better publicized, and better integrated with partner stores.

Staples CPUs are integrated with each store's respective Copy & Print Services center. Store designs vary, and Staples installs the postal counter to mesh with its surroundings. The implementations appear modern, clean, and inviting. Three examples of the integration follow:

Shrewsbury, MA: Staples #59 CPU:

Sturbridge, MA: Staples #1193 CPU:

Westborough, MA: Staples #1216 CPU:

The CPUs are staffed by Copy & Print Center personnel who have received training from USPS employees.

Staples CPUs are operational during all store hours, including Sundays. This means that customers will have the opportunity to purchase stamps and mail packages until [typically] 7-9 P.M. during weekdays, 6-7 P.M. on Saturdays, and 6 P.M. on Sundays. The stores, and thus postal services, are open during most federal holidays as well. (Note: This mail will not necessarily be picked up and processed the day it is entered into the mailstream.)

These Contract Postal Units operations offer most, though not all, standard postal products. The operations, at least at their inception, are offering a variety of stamps including several issues of commemorative Forever and Global Forever stamps. They accept Priority, Priority Express, Standard Mail, and large first-class packages. Most additional services, including Certified Mail, are available.

The following services are not offered at these Contract Postal Units: P.O. Boxes; money orders; Registered Mail; Certificates of Mailing; Library Mail; and (interestingly enough) Media Mail. Furthermore, Staples CPUs do not sell postal stationery such as stamped envelopes and stamped postal cards. According to an official USPS statement, the services provided at Staples CPUs represent a "simplified product portfolio containing our most popular products and services." A Postal Service official stated that Media Mail volumes "are low and [thus] not considered one of our most popular products." USPS has been de-emphasizing Media Mail and some other cheaper services as it promotes Priority Mail and recently rebranded Priority Mail Express. While the omission would affect a relatively small number of transactions, USPS may be nudging customers into utilizing more expensive postal products. (All omitted services are still available at all 'standard' post offices.)

In a unique move among USPS partners, Staples will offer 5% Staples Rewards for the postage on packages paid for and shipped at its Contract Postal Unit locations. Thus, if one ships a $20 Priority Express Mail package and pays for the metered postage at Staples, one would receive $1 in Staples Rewards. "This is our killer app," declared one Staples staffer, suggesting that this aspect of the program would make customers' postal experience noticeably superior to that at other post offices. However, the Staples Rewards offer does not apply to stamps purchased at Staples CPUs.

5% Staples Rewards sign

While the provisions of the Retail Partner Expansion Program have not been publicly disclosed, most individual Contract Postal Units earn a commission of 6% to 10% on postal services rendered. Thus, even if 5% of all package purchases were redeemed as Staples Rewards the company comes out well ahead.

(Customers can receive discounts directly from the Postal Service by utilizing some of its online prepaid services.)

An initial media story -- a local Patch interpretation of USPS's Bay Area news release -- wrongly declared that USPS is paying rent to Staples as part of the pilot arrangement. Such a provision is not part of any standard Contract Postal Unit agreement, and Ms. Reid has confirmed that the precedent holds in USPS's contract with Staples.

This is not the first service arrangement between USPS and Staples Inc. Staples stores have offered booklets of Forever stamps at its checkout counters for several years under as part of USPS's "Alternative Access" program. The Postal Service has similar arrangements with most large retailers, and Staples stores not impacted by the USPS pilot program continue to offer this modest service.

Prior to the pilot program, each Staples store maintained a full-service UPS shipping counter. These services are still offered at all non-pilot program stores. At the 82 CPU locations, UPS computers were disconnected and its services ceased to be offered the moment when Postal Service machines became functional. This step occurs toward the end of the one-to-two-day, four-hour training session that postal staff (including some from Postal Headquarters and other District retail personnel) conduct with Copy & Print Services staff. All Staples locations continue to serve as drop-off points for prepaid UPS parcels. Thus, UPS's arrangement with the 82 USPS pilot sites is similar to that of USPS with its "Village Post Offices," whose counters accept only domestic prepaid [primarily Priority Mail Flat-Rate] packages.

The CPUs operated by Staples are equipped with USPS's new, modern blue-atop-faux-wood counter arrangements that appear in many CPUs and in recently remodeled/relocated post offices. In addition to the primary retail counter, other counter units house Priority Mail Flat-Rate packaging and forms for services such as Certified Mail.

A courtesy letter collection box is located in one of the secondary counter units. It is subtle and, if not marked appropriately, could easily be mistaken for the slot for a garbage can. The Postal Service is looking to install blue collection boxes outside most (if not all) of its Staples CPU locations.

Staples: Internal Mail Collection Point:

The operations utilize a specially developed version of the Postal Service's Contract Access Retail System (CARS) -- a two-monitor, touch-screen arrangement that enables customers to view their transaction as it is processed by a CPU operator.

A large Sonic Eagle sign has been installed on the façade of each Staples CPU location. The sign states "Approved Postal Provider" in place of Contract Postal Unit. The signs light up at night except where prohibited by local zoning ordinances. A recent Freedom of Information request revealed that a similar (though possibly smaller) backlit sign installed at a Village Post Office costs about $2,300.

Worcester, MA: Staples #1218 CPU:

Beyond the pre-opening training seminar, local Postal Service managers are available to answer any Staples's staff questions regarding products, services, or technical computer issues. Postal staff appeared to be engaged with, and supportive of, their Staples counterparts.

The American Postal Workers Union (APWU) has yet to comment on the pilot program. Save the Post Office (STPO) has detailed previous opposition to the CPU pilot program involving Sears stores in 1989. The APWU, which counts as members thousands of full-time post office window clerks, has frequently taken a negative stance on Contract Postal Units. CPUs are perceived as siphoning business from union-staffed post offices, which could result in reduced staffing at -- or the closure of -- nearby post offices. The STPO piece also discusses concerns that such CPU programs might provide a step toward USPS's outsourcing of more operations, which could ultimately result in the privatization of the Postal Service.

Postmasters tasked with managing local Staples operations took a by-and-large positive view of the new outlets during informal discussions. When asked whether the proximity of a new Staples CPU in northeast Worcester might prompt the closure of the small retail post office in the shopping plaza across the street, a Postmaster replied that s/he can't imagine that being the case, especially because local low-income residents are heavy users of money orders (which are not provided at the counters at Staples). Another Postmaster suspected that while the Staples might usurp a bit of the revenue from his/her office, most of the nearby CPU's business would stem from customers who would have otherwise shipped their packages using other carriers. S/he expected that the result would be a "net positive" for the Postal Service.

Two hours after one of the Massachusetts CPUs opened, a large rolling postal hamper was piled high with parcels. Staples staff informed me that the mailing was entered by a local business owner who'd always used the UPS counter at the store to ship his packages. Instead the Postal Service became the recipient of nearly $200 in revenue.

The postal specialist who'd conducted the CPU training called the local post office to request an additional mail collection. Within ten minutes a local carrier had pulled in and rolled the mail hamper out of the Staples and to his truck. At least in central Massachusetts, the program was off to a promising start.

Sunday, November 3, 2013

Postal Tour: Mankato, Minnesota

Mankato, MN -- state map

Mankato is a little city with a rich history, located in south central Minnesota about 75 miles southwest of the Twin Cities. It lies along the Minnesota River, a tributary of the Mississippi that merges with said by Saint Paul. The river serves as a county border and separates Mankato (population 40,000) from North Mankato (13,000). This situation inspired Mankato's motto: "A Little Twin Cities, A Lot Minnesota." The river propelled much of Mankato's early development, and the City of Mankato's website notes that "by 1854, U.S. mail was delivered regularly to Mankato due to the efforts of General Store owner George Marsh."

Local sources claim that the town's name was originally Mahkato, meaning "greenish blue earth to [the area's] first inhabitants, the Dakota Indians". Indeed, Mankato is the county seat of Blue Earth County. According to a currently unavailable link referenced by Wikipedia, "a typographical error by a clerk established the name as Mankato" instead of Mahkato.

Here's a local post office map that shows the sites discussed in this story:
Mankato, MN post office map

At the end of the 19th century Mankato was among the largest cities in Minnesota, and the city needed a post office that met its stature. That building still serves as the Mankato main post office today, and an analysis of USPS's Owned Facilities Report reveals that this is among the oldest post office buildings anywhere in the country that is still in operation today. The City of Mankato has published a thorough walking tour of the city and states the following about the post office: "This building was built in 1895 and remodeled in 1933 to the structure seen today. It is constructed of Mankato Kasota stone. Since it blends seamlessly, you can’t tell the difference between additions. The second floor was used for Federal offices and courts. Those who served our country during the last great wars left from here."

The Federal Judicial Center has made available an image from the National Archives taken in 1900. I've edited the photo and made it available on the PMCC's Minnesota Post Office Photos page as well as here.

Mankato, MN post office in 1900

The building was and is still stunning. The local stone is a modest yet distinct orange, and though the clock tower (a common sight for 19th-century federal buildings) was removed during the building's extension to the south (toward where the photographer stood with respect to the above image), the grandeur of the building is evident. The chimney remains and the setbacks above the main building entrances are unique. The signage winds perfectly above the arched doorways. The length of the building doubled during its extension, but the consistency of the architecture makes the front of the building appear seamless.

112 years after the above photograph was taken, I stood at roughly the same spot and snapped this view of the post office as it now stands:
Mankato, MN post office in 2012

According to USPS documents the "Mankato MPO is a USPS-owned 69,839 square-foot facility that houses 42 [carrier] routes, Postmaster and staff, the Area-2 Manager of Post Office Operations and staff, retail and post office box operations."

Across the river North Mankato possesses a more modest post office, albeit one with part of the local art walking tour in front of it:
North Mankato, MN branch post office, 2012

According to the most recent USPS Leased Facilities Report available, the North Mankato post office lease calls for a mere 667 square feet of leased space at $6,160 per year. (That particular contract expired in July; the current cost isn't available.) The post office is a finance unit, housing retail operations and PO Boxes but no carriers.

Mankato's Processing and Distribution Facility (P&DF) was the mail processing hub for southwest Minnesota until implementation of USPS's Area Mail Processing plan took (or will soon take) those operations to Minneapolis. According to USPS documents posted prior to consolidation, "the existing 78,734 square-foot facility on an 8.0 acre site was originally occupied in 1992. The Mankato [P&DF] currently processes all originating and destinating letters and flats, and incoming Priority/FCM parcels for the 560 and 561 offices. In addition to processing operations, the facility houses a Business Mail Entry Unit (BMEU)."

Mankato, MN P&DF:
Mankato P&DF

The facility held more than 100 jobs until what will be the consolidation of both originating (incoming, to-be-cancelled) and destinating (processed, to-be-delivered) mail operations; the facility continues to be used for a handful of postal operations. Originally slated to occur in 2014, cancelling operations were moved to Minneapolis on June 1. An April 11 article in The Mankato Free Press states: "The facility's larger operation is the sorting of mail coming in from other processing centers around the country and sending it on to the proper post offices in a region that stretches from Hills (just east of the South Dakota line) to Albert Lea to Waseca to Belle Plaine. That work is anticipated to be transferred to Minneapolis in just under a year." Local APWU president Paul Rodgers said he expected those consolidations to occur this coming February. Finally, the massive Minneapolis/St. Paul Network Distribution Center (NDC) will absorb a few other operations from Mankato.

Like the North Mankato branch post office, Mankato's Madison East Station is a non-carrier finance facility with retail operations and PO Boxes. Located in the back of a sizable shopping plaza, the 1,326-square-foot facility is leased until 2017 for $16,170 per year.

Mankato, MN: Madison East Station post office:
Mankato, MN: Madison East Station post office Finally, there Mankato's Hy-Vee supermarket has a Contract Postal Unit at the customer service counter in the front of the store.

Mankato, MN: Hy-Vee CPU
Mankato, MN: Hy-Vee CPU