Can Lockers Help the Postal Service Get Hip?

(Frank Duenzl/picture-alliance/dpa/AP Images)

With a little fine-tuning, USPS could revamp its self-service parcel locker system to compete with Amazon and win over millennials.

The United States Postal Service came out with a report at the end of July exploring how the agency can better reach millennial consumers. The sophomoric cover and optimistic content of the report have been denounced as “hilariously dumb.” But in reality, USPS is headed in the right direction.

Despite struggling toward solvency, it’s unfair to blame USPS for its $45 billion loss in the last decade. As the Prospect reported in April, this isn’t about Amazon or any other postal service customer (which is what Amazon really is, a customer). It’s about ditching the saddle-bags that USPS has been lugging since 2006, courtesy of the Postal Accountability and Enhancement Act (PAEA).

Congress foisted PAEA on the Postal Service back when the agency was in the black, requiring it to set aside money for future postal employees’ retirements for the next 75 years. No other public or private institution has ever been required to do this. If they had been, they’d be deep in the red, too.

Despite its unique burdens, the agency’s slump is not for lack of trying. In addition to the millennial report, they’ve kept up with technology: An Augmented Reality app enables your grandma to sing “Happy Birthday” as you open her gift, while their Informed Delivery service mirrors the “where’s my order” feature that Amazon and other delivery services have conditioned consumers to expect.

President Donald Trump shames USPS for becoming Amazon’s “delivery boy,” even though Amazon, a major USPS customer, is providing much-needed income to a government agency. But Trump is really laying the groundwork to kill the USPS. In a very familiar state of affairs, he’s created a task force to study privatizing the Postal Service, and will probably profit from its privatization to boot.

Meanwhile, Democrats have been looking at a proposal to breathe new life into the Postal Service. Senators Bernie Sanders of Vermont and Kirsten Gillibrand of New York want to return to the age-old system of postal banking, which would allow consumers, especially those who can’t afford commercial banking, to do basic banking—like checking, savings, and short-term loans—at their public post office. But the ambitious Postal Banking Act that Gillibrand introduced is unlikely to get serious consideration unless the Democrats capture at least one of the houses of Congress.

So despite its frivolous cartoons, USPS should be applauded for tackling the quandary of how to reach millennials. In addition to novel ideas such as a Loyalty Rewards Program and one-stop shopping postal kiosk machines (an improvement from old stamp-vending machines that would enable fast label and card printing), the report stressed that the agency wants millennials to be more aware of the services they already offer, such as tracking, card customization, and package pickups.

But the report failed to explore how the agency could further capitalize on parcel delivery or address problems like last-mile delivery. Packages are the one type of mail that has actually increased in the last decade, thanks to the rise of e-commerce trends like online shopping. “More packages and fewer letters is the new normal for the U.S. Postal Service,” the Postal Service’s Office of the Inspector General noted in blog post.

A key part of package delivery is the last mile (or the final mile), which is postal jargon for the shorter, final segment of delivery, from the post office to your doorstep. The problem with the last mile is that it is normally the most expensive (often over 50 percent of the cost of the total shipping), and most tedious, because it involves multiple drop-offs with “low-drop sizes.” In other words, the last mile requires lots of drop-off spots, but typically only one or two packages are getting dropped off at each spot. The drop-offs can be separated by sheer distance (in rural areas) or by traffic (in urban areas), both of which increase time and cost.

For years, the solution to make the last mile more efficient and less expensive has been optimization—computers calculate the fastest and cheapest route, taking into consideration the number of stops and their locations. But what if USPS just didn’t do the final mile?

 

LIKE MOST WHOLE FOODS MARKETS, the one in my neighborhood has a hot-foods section, a coffee shop, as well as a massive display of fresh produce. But another feature of this store is the large gray-painted metal box that looms to your left as you enter. It’s almost inconspicuous. For a while, I didn’t even notice it because I would turn my back to it as I grabbed a basket. 

The metal cabinet-like structure is an Amazon locker, a new fixture in Whole Foods stores across the country. Amazon lockers represent the e-commerce giant’s latest attempt to eliminate the final mile. But Amazon did not actually invent the idea of a locker instead of doorstep delivery. The USPS did six years ago, when it created the original package locker, called “gopost.”

As online shopping grew, gopost dealt with the problem of package theft. “Imagine if customers didn’t have to wait at home for a package delivery or have to rush home from work to retrieve a package off their front porch,” a promotional blog post proclaimed in 2013 (although Amazon has since rolled out a delivery photo system for theft prevention, this doesn’t eliminate the final mile problem). Since the gopost pilot program launched in New York and metro Washington, D.C., several years ago, gopost has expanded to New Jersey and last month, unveiled the service in San Francisco (even though there was opposition to the aesthetics of the locker).

Despite its expansion, gopost continues to have glaring flaws. “Gopost sucks for shipping,” said one anonymous commenter just last year, in April 2017. Gopost has a slightly more tedious registration system, which was a barrier to entry for many, especially for people without access to a computer, though there is no cost to use the system. According to recent feedback, the screens on the lockers (where a user would scan his or her gopost card and input their PIN) are often reported to be broken. Packages were frequently lost, and, of course, gopost is limited to USPS packages, which is frustrating to many. UPS and FedEx have similar services, though FedEx’s is limited to the Dallas metro area. The UPS Access Point system (established in 2014) not only allows customers to ship to lockers (located in Illinois, New York, Pennsylvania, Virginia, and Washington state), but also to route their packages to nearby local stores for pick-up.

When Amazon stepped in, there was no need to reinvent the wheel. Instead, they’re just doing what others did, with slightly better technology. Although I was skeptical at first and continued to send my packages to my home address (ignoring Amazon’s promotional messages about lockers “near this address”), I’m a locker believer.

As my own beta-test of the Amazon locker, the first thing I shipped to myself were some sponges (something little—I was wary of the comments about lost packages). Like all other Amazon Prime packages, I was told it would miraculously arrive in the next two days for seemingly free shipping. It arrived in one. An email tells you the package is in the locker and encloses the bar code for pickup. The lockers are shared and your package (which is still in a box or envelope like a normal package) is placed in an available locker based on its size, as there are different-sized lockers. When you arrive, you scan the barcode—you can also punch in a code—and voilà! Since I received my sponges, I haven’t ordered anything from Amazon and not shipped it to the locker. It’s just so easy.

Gopost (as well as UPS and FedEx lockers) do have a few advantages. For one, you’re not limited to products on the Amazon website. Also, you can send gifts. Gopost’s registration system makes it so that you actually receive an address. Whereas with the Amazon locker, I’d have to forward my email with the barcode to the recipient, giving away the surprise.

But Amazon knew it could count on self-shopping (and even self-gifting during the holidays), and they were right: Amazon Locker has taken off in a way gopost never did. As of 2017, more than 2,000 Amazon lockers now exist around the country. One of the most common locations is Whole Foods, thanks to the Amazon’s recent acquisition of the chain, which has given the locker service more visibility. But there are also lockers in other places, such as convenience stores and apartment buildings, called “Amazon Hubs.” While this seems like a lot (in 2016, UPS reported having 300 lockers), they might need more: On a few occasions, the locker closest to me has been full; I couldn’t ship to it. The final mile is the only part of the shipping process that Amazon doesn’t control (they hand over the reins to USPS), and so lockers are in fact helping them cut costs as well. For USPS, while they wait for autonomous vehicles with lockers on wheels to take care of the last mile, rethinking and redesigning gopost to eliminate their own final mile costs doesn’t seem like a bad idea.

Although Amazon seems to be on a trajectory to dominate the locker market, USPS officials should not be discouraged. The success of Amazon Locker (and the smaller gopost expansion) means there is a market for parcel services on the final mile. Though Amazon Locker seems to have a lock on the market right now, gopost still has an opportunity to remain competitive in the locker field, especially considering that Amazon has yet to set up a system of sending gifts via lockers. Maybe combining gopost locker locations with the one-stop mail kiosks and customizable card centers is how the Postal Service find its way into hearts of millennials.

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