Various postal bills in recent years have called for greater use of curbside mail drop offs and neighborhood cluster boxes as a way to help the U.S. Postal Service return to profitability.
The idea is that mail carriers could do their jobs faster and far more efficiently by avoiding deliveries to doorsteps. But a new report from the USPS inspector general’s office casts doubt on how much the change would benefit the agency financially.
A survey commissioned by the watchdog agency showed that door-delivery customers engaged more with mail advertisements than residents who use curbside and cluster mail boxes.
The numbers suggest that mail advertising, which accounted for 22 percent of the Postal Service’s $28 billion in product revenue two years ago, would become less attractive with a greater emphasis on curbside and cluster mail boxes.
Any loss of advertising revenue would only exacerbate the agency’s financial problems. USPS has lost billions of dollars annually for the past eight years, including $5.5 billion in 2014.
In the survey, respondents who receive door deliveries said they read and respond to credit-card solicitations at a rate of 10.6 percent, whereas the rate was 3.1 percent for cluster boxes.
With other types of mail advertisements, the findings were “qualitatively similar to the credit card solicitation results, albeit with less dramatic differences by mode,” according to the report.
“We suggest that the Postal Service work closely with advertising mailers to better understand customer attitudes, their underlying causes, and any detrimental impacts on mail demand,” the inspector general said.
The survey, which the inspector general’s office commissioned from the research firm InfoTrends, covered 5,000 households.
Republican and Democratic lawmakers have pushed for greater use of curbside and cluster mail boxes, but opponents say the Postal Service should focus on new products and services rather than cuts.
It is unclear whether the Postal Service would truly lose advertising revenue by moving away from the door-delivery model, or whether it could make up for the potential loss with cost savings.
Those are questions USPS still needs to answer as lawmakers continue to negotiate over comprehensive postal legislation, something that has eluded lawmakers for years.
It’s worth noting that two of the biggest drags on USPS finances are the recent declines in First Class mail volume and a 2006 law that requires the agency to make advanced payments for retiree health benefits. The cost of the mandate is more than $5 billion annually, and USPS has defaulted on the payment for the past four years.
Postal unions have argued that USPS could earn a profit if not for the prefunding expense, but agency officials contend that the agency is too deeply in debt and in need of new equipment for that to be the case. Still, both sides have called on Congress to end or restructure the requirement.