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U.S. Postal Service: Addressing Policy Gaps Could Improve Pilot Design and Evaluation for Postal Innovations

Published by the Government Accountability Office on 2019-03-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office
             Report to the Ranking Member,
             Permanent Subcommittee on
             Investigations, Committee on Homeland
             Security and Governmental Affairs, U.S.
             Senate

             U.S. POSTAL
March 2019




             SERVICE

             Addressing Policy
             Gaps Could Improve
             Pilot Design and
             Evaluation for Postal
             Innovations




GAO-19-293
                                                 March 2019

                                                 U.S. POSTAL SERVICE
                                                 Addressing Policy Gaps Could Improve Pilot Design
                                                 and Evaluation for Postal Innovations
Highlights of GAO-19-293, a report to the
Ranking Member, Permanent Subcommittee on
Investigations, Committee on Homeland
Security and Governmental Affairs, U.S. Senate



Why GAO Did This Study                           What GAO Found
USPS faces a challenging business                From fiscal years 2013 through 2017, the U.S. Postal Service (USPS) piloted 24
environment that has led to reduced              key innovations intended primarily to generate revenue or improve customers’
demand for its traditional services and          experience. The following four selected innovations illustrate these efforts:
significant financial losses. USPS aims
to address this challenge by offering            •   Same-Day Delivery: USPS delivered goods consumers bought online or in
innovative products and services. The                stores. The pilot sought to test the product’s feasibility and revenue potential.
success of these efforts will depend, in         •   Grocery Delivery: USPS delivered groceries to consumers in metropolitan
part, on how effectively USPS tests                  areas. The pilot sought to test the product’s feasibility and revenue potential.
each innovation’s performance on a               •   Informed Delivery: USPS emailed customers an advance image of the mail
small scale to determine whether, how,               they would receive. The pilot sought to test the service’s potential benefits,
and when to launch an innovation more                such as generating new revenue from advertisers that may use the service.
broadly—a practice known as “piloting.”          •   Keyless Parcel Lockers: USPS is testing lockers where customers can
GAO was asked to review USPS’s                       independently pick up packages at post offices. The pilot seeks to test the
efforts to develop postal innovations.               service’s operation and potential benefits for USPS and customers.
This report (1) describes key
                                                 (From Left to Right) Metro Post (same-day delivery), Grocery Delivery Tote Bag, Informed
innovations that USPS recently piloted           Delivery Email Notification, and Keyless Parcel Locker Unit
and (2) examines the extent to which
USPS's policies reflect leading practices
for pilot design and evaluation. GAO
analyzed information on USPS pilots
from fiscal years 2013 through 2017;
compared USPS policies for piloting
innovations to leading practices for pilot
design and evaluation in prior GAO work
and relevant standards for internal
control; and selected four key
innovations based on various
characteristics (e.g., innovation type) to       USPS’s policies for piloting innovations do not fully reflect the five leading
serve as illustrative examples of USPS’s         practices for pilot design and evaluation identified in GAO’s prior work. The
piloting efforts.                                policies fully reflect two of the leading practices because they require articulating
What GAO Recommends                              a methodology for evaluating pilot performance and documenting lessons
                                                 learned. The policies do not fully reflect the other three practices because they
GAO recommends that USPS (1)                     do not require: (1) linking pilot objectives to identified performance measures; (2)
develop policies that fully reflect leading      documenting conclusions based on pilot results; or (3) communicating with key
practices for pilot design and evaluation        external stakeholders, as appropriate. These policy gaps limit the extent to which
and (2) develop tools or training to             USPS can ensure that it is making good resource allocation decisions based on
ensure consistent documentation of               pilot experiences. For example, GAO found that USPS did not document its
lessons learned from pilots. USPS
                                                 conclusions based on the results of its pilots of same-day delivery, grocery
neither agreed nor disagreed with the
                                                 delivery, and Informed Delivery. Documenting conclusions can be especially
recommendations but described actions
it plans to take related to each.                important when USPS continues to offer the product or service after the pilot has
                                                 concluded, even though the pilot did not achieve all of its objectives, as was the
                                                 case with these three innovations. Further, while USPS’s policies require
                                                 documenting lessons learned from its pilots, USPS did not do so for some pilots
                                                 GAO reviewed. Senior USPS officials said that USPS did not consistently follow
                                                 this policy because it had not developed tools or training that could help ensure
View GAO-19-293. For more information,           such consistency. As a result, USPS risks losing information that could be
contact Lori Rectanus at (202) 512-2834 or       relevant to future innovation efforts.
RectanusL@gao.gov.
                                                 ______________________________________ United States Government Accountability Office
Contents


Letter                                                                                    1
               Background                                                                 4
               USPS Piloted Key Innovations Are Intended Primarily to Generate
                 Revenue or Improve Customers’ Experience                                 8
               USPS’s Policies for Piloting Key Innovations Reflect Some but Not
                 All Leading Practices for Pilot Design and Evaluation                   15
               Conclusions                                                               20
               Recommendations for Executive Action                                      21
               Agency Comments and Our Evaluation                                        21

Appendix I     List of U.S. Postal Service Key Piloted Innovations, Fiscal Years
               2013-2017                                                                 24



Appendix II    Comments from the U.S. Postal Service                                     26



Appendix III   GAO Contact and Staff Acknowledgments                                     28


Tables
               Table 1: Extent to Which the U.S. Postal Service’s (USPS)
                       Policies for Pilot Design and Evaluation Reflect Leading
                       Practices                                                         15
               Table 2: Extent to Which the U.S. Postal Service (USPS)
                       Documented Lessons Learned for Key Piloted
                       Innovations Selected by GAO                                       17
               Table 3: U.S. Postal Service (USPS) Key Piloted Innovations,
                       Fiscal Years 2013 through 2017                                    24

Figures
               Figure 1: U.S. Postal Service (USPS) Total Operating Revenue
                        and Total Operating Expenses, Fiscal Years 2007
                        through 2017                                                      5
               Figure 2: Key Piloted U.S. Postal Service (USPS) Innovations by
                        Primary Goal, Fiscal Years 2013 through 2017                      9
               Figure 3: Snapshot of U.S. Postal Service Website for Same-Day
                        Delivery Product Innovation                                      10


               Page i                                           GAO-19-293 Postal Innovations
Figure 4: Illustration of a Tote Used for U.S. Postal Service
         Grocery Delivery Product Innovation                             11
Figure 5: Snapshot of U.S. Postal Service Informed Delivery
         Notification                                                    13
Figure 6: Photo of U.S. Postal Service Keyless Parcel Locker Unit        14




Page ii                                         GAO-19-293 Postal Innovations
Abbreviations

MTAC              Mailers’ Technical Advisory Committee
PRC               Postal Regulatory Commission
USPS              U.S. Postal Service



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Page iii                                                    GAO-19-293 Postal Innovations
441 G St. N.W.
Washington, DC 20548




                       March 14, 2019

                       The Honorable Thomas R. Carper
                       Ranking Member
                       Permanent Subcommittee on Investigations
                       Committee on Homeland Security and Governmental Affairs
                       United States Senate

                       Dear Mr. Carper:

                       The U.S. Postal Service (USPS) faces a challenging business
                       environment that has reduced demand for traditional postal services and
                       led to significant financial losses. Revenue from USPS’s most profitable
                       postal-service category—First-Class Mail—has declined over the last
                       decade, from $38.2 billion in fiscal year 2008 to $25 billion in fiscal year
                       2018. According to USPS, offering innovative products and services is
                       critical to adapting to evolving business and customer needs and
                       improving its financial condition. The success of any particular innovation
                       will depend, in part, on how effectively USPS tests the innovative
                       product’s or service’s performance on a small scale to determine whether,
                       how, and when to launch the innovation more broadly—a practice known
                       as “piloting.” Effectively piloting innovations can help ensure that USPS
                       invests its limited resources on innovations that are most likely to improve
                       its long-term viability.

                       You asked us to review USPS’s efforts to develop innovative products
                       and services. This report (1) describes key innovations USPS has
                       recently piloted and (2) examines the extent to which USPS’s policies for
                       piloting key innovations reflect leading practices for pilot design and
                       evaluation. 1

                       To identify key innovations that USPS has recently piloted, we first
                       requested information from USPS on all such innovations piloted between




                       1
                        For the purpose of this report, we focused on “key innovations,” which USPS defines as
                       new products and services that may have a significant effect on cost, the end consumer,
                       the shipper, or the mailer.




                       Page 1                                                    GAO-19-293 Postal Innovations
fiscal years 2013 and 2017. 2 In response, USPS identified 24 key piloted
innovations. We compared the list provided by USPS against information
in USPS, USPS Office of Inspector General, and Postal Regulatory
Commission (PRC)—an independent agency with regulatory oversight
over USPS—documents to help corroborate the completeness and
accuracy of USPS’s response. We conducted an in-depth review of 4 of
the 24 innovations to provide illustrative examples of USPS’s piloting
efforts. We selected the 4 innovations—Metro Post (i.e., same-day
delivery), Customized Delivery (i.e., grocery delivery), Informed Delivery,
and keyless parcel lockers—to represent a range of the innovations’
primary characteristics, such as innovation type (e.g., new product or new
service); primary innovation goal (e.g., generating revenue or improving
customer service); and investment level. 3

To evaluate the extent to which USPS’s policies for piloting key
innovations reflect leading practices for pilot design and evaluation, we
compared policies identified by USPS officials as applicable to its efforts
to pilot innovative products and services 4 against five leading practices
we identified in our prior work, as well as standards for internal control




2
 We selected fiscal year 2013 because it corresponds with the fiscal year that USPS
issued its Five-Year Business Plan to return USPS to financial and operational viability,
including actions to confront revenue declines through innovation. We selected fiscal year
2017 because it was the most recent fiscal year for which USPS had available information
on piloted innovations at the time of our review.
3
 A postal “product” is statutorily defined as a postal service with a distinct cost or market
characteristic for which a rate or rates are, or may reasonably be, applied, and a “postal
service” refers to the delivery of letters, printed matter, or mailable packages, including
acceptance, collection, sorting, and transportation, or other ancillary function. See 39
U.S.C. §§ 102(5), (6). In addition, the Postal Service was statutorily authorized, subject to
Postal Regulatory Commission approval, to provide “nonpostal services” offered as of
January 1, 2006. In general, the term “nonpostal service” is defined by statute to mean
any service that is not a “postal service.” See 39 U.S.C. § 404(e)(1). We did not
independently evaluate whether USPS’s categorization of each innovation aligned with
these definitions. For the purpose of this report, we collectively refer to USPS’s three
types of key innovations—new service, new product, or enhancement to an existing
product or postal/nonpostal service—as “innovative products and services.” We are not
reporting specific investment, cost, revenue, or volume data for piloted innovations
because USPS considers this information to be proprietary.
4
 USPS, Handbook F-66, General Investment Policies and Procedures (Sept. 2018) and
Handbook F-66D, Investment Policies and Procedures — Business Initiatives, Alliances,
Real Estate Development, and Major Operating Expense Investments (February 2006).




Page 2                                                        GAO-19-293 Postal Innovations
related to documenting key information: 5 The five practices we identified
include:

•   establish appropriate and measurable objectives linked with identified
    performance measures;
•   articulate a methodology for evaluating pilot performance;
•   evaluate pilot performance and identify and document lessons
    learned;
•   draw and document conclusions about scalability (i.e., determining
    whether, how, and when to launch the innovation more broadly)
    based on pilot results; and
•   ensure appropriate two-way communication at all stages of the pilot
    with key internal and external stakeholders in order to understand and
    address their views.
We discussed these leading practices with senior USPS officials, and
they agreed that the practices were reasonable and relevant to USPS’s
efforts to pilot innovative products and services.

We examined how USPS followed its policies and applied these leading
practices for the four selected key innovations by reviewing the pilot




5
 Our prior work identifies leading practices for designing and evaluating pilot programs. In
our prior work, we have applied these practices to multiple federal agencies and
programs. For the purpose of this report, we made some modifications to these leading
practices. For example, we modified the leading practice related to evaluating pilot
performance to make explicit that the leading practice includes documenting lessons
learned. For the prior work that we reviewed to identify these five leading practices, see
GAO, Tax Administration: IRS Needs to Strengthen Its Approach for Evaluating the
SRFMI Data-Sharing Pilot Program, GAO-09-45 (Washington, D.C.: Nov. 7, 2008); DATA
Act: Section 5 Pilot Design Issues Need to Be Addressed to Meet Goal of Reducing
Recipient Reporting Burden, GAO-16-438 (Washington, D.C.: Apr. 19, 2016);
Performance Partnerships: Agencies Need to Better Identify Resource Contributions to
Sustain Disconnected Youth Pilot Programs and Data to Assess Pilot Results,
GAO-17-208 (Washington, D.C.: Apr. 18, 2017); and Identity Theft: Improved
Collaboration Could Increase Success of IRS Initiatives to Prevent Refund Fraud,
GAO-18-20 (Washington, D.C., Nov. 28, 2017). For standards for internal control that we
reviewed, see GAO, Standards for Internal Control in the Federal Government,
GAO-14-704G (Washington, D.C.: Sept. 10, 2014), Principle 3, Paragraph 9, and
Committee of Sponsoring Organizations of the Treadway Commission, Internal Control-
Integrated Framework (2013), Chapter 4, Additional Considerations, Documentation.




Page 3                                                       GAO-19-293 Postal Innovations
                            proposals and revenue and other performance data. 6 Our findings related
                            to these four selected key innovations are not generalizable to all
                            innovations piloted by USPS but provide illustrative examples of how
                            USPS has followed its policies and applied the leading practices that we
                            identified.

                            For both objectives, we also interviewed USPS officials and
                            representatives from four postal associations knowledgeable about
                            USPS’s efforts to develop innovative products and services, as well as
                            two mailers directly affected by USPS’s Informed Delivery innovation. 7

                            We conducted this performance audit from December 2017 to March
                            2019 in accordance with generally accepted government auditing
                            standards. Those standards require that we plan and perform the audit to
                            obtain sufficient, appropriate evidence to provide a reasonable basis for
                            our findings and conclusions based on our audit objectives. We believe
                            that the evidence obtained provides a reasonable basis for our findings
                            and conclusions based on our audit objectives.



Background
USPS’s Financial Position   USPS’s mission is to provide universal postal service while operating as a
and Strategic Goals         self-financing entity, but USPS’s current financial position is not
                            sustainable. To achieve its mission, USPS must cover its expenses
                            through revenues generated from the sale of its products and services.
                            However, USPS’s total operating expenses have exceeded total
                            operating revenue each year since fiscal year 2007, including a $2.6
                            billion loss from operations in fiscal year 2017 alone (see fig. 1).
                            Moreover, we have reported that USPS’s overall financial condition is



                            6
                             As we discuss later in this report, USPS had not concluded the pilot for one of the four
                            key innovations we selected for review. Consequently, for this innovation, we did not
                            compare USPS’s application of two leading practices: evaluate pilot performance and
                            identify and document lessons learned and draw and document conclusions about
                            scalability based on pilot results.
                            7
                             We did not interview mailers for other innovations that we selected either because
                            representatives of mailers that worked directly with USPS during the pilots of these
                            innovations were no longer available or because individual mailers were not directly
                            affected by the innovation.




                            Page 4                                                       GAO-19-293 Postal Innovations
deteriorating. 8 For example, in August 2018 we reported that USPS had
about $149 billion in unfunded liabilities and debt at the end of fiscal year
2017. 9 As a result, USPS’s financial condition remains on our list of high-
risk areas needing attention by Congress and the executive branch. 10

Figure 1: U.S. Postal Service (USPS) Total Operating Revenue and Total Operating
Expenses, Fiscal Years 2007 through 2017




8
 For example, see GAO, U.S. Postal Service: Key Considerations for Restoring Fiscal
Sustainability, GAO-17-404T (Washington, D.C.: Feb. 7, 2017) and U.S. Postal Service:
Action Needed to Address Unfunded Benefit Liabilities, GAO-14-398T (Washington, D.C.:
Mar. 13, 2014)
9
  GAO, Postal Retiree Health Benefits: Unsustainable Finances Need to Be Addressed,
GAO-18-602 (Washington, D.C.: Aug. 31, 2018).
10
   GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts
Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017), p.130. We added
USPS’s financial condition to our list of high-risk areas in July 2009.




Page 5                                                    GAO-19-293 Postal Innovations
                         According to USPS financial documents, its ability to sell innovative
                         products and services will be a key factor in improving its financial
                         condition. Thus, USPS established a strategic goal to “innovate faster to
                         deliver value” to its customers, by making investments in innovations that
                         respond to rapidly evolving customer needs. 11 A key element of this effort
                         is to accelerate testing of innovative products and services to better serve
                         these needs, according to USPS.

                         While USPS is allowed to develop certain new postal products and
                         services, there are statutory restrictions that currently limit the range of
                         innovations USPS can offer. For example, under current statute, USPS is
                         not permitted to ship alcoholic beverages. 12 Similarly, although USPS is
                         explicitly authorized to provide services to federal executive agencies
                         (e.g., passport services), such authorization does not include services to
                         state, local, and tribal governments. Legislation has been introduced in
                         previous sessions of Congress that would permit USPS to deliver
                         alcoholic beverages and allow USPS to provide property and services to
                         state, local, and tribal governments under certain conditions. 13 According
                         to USPS officials, USPS supports these legislative proposals, which could
                         enhance its ability to offer innovative products and services.


USPS Postal Innovation   According to USPS officials, two USPS handbooks include policies
Pilot Policies and       applicable to piloting key innovations. Specifically, the first handbook
                         includes requirements, procedures, and responsibilities for all types of
Responsibilities
                         investment programs and projects undertaken by USPS, regardless of
                         size, cost, or complexity. 14 This handbook, for example, requires the
                         identification and documentation of lessons learned for all investments
                         and projects. The second handbook includes requirements and


                         11
                          USPS, Future Ready: U.S. Postal Service Five-Year Strategic Plan Fiscal Years 2017 to
                         2021 (Sept. 30, 2016).
                         12
                              18 U.S.C. § 1716(f).
                         13
                           For provision of property and services to state, local, and tribal governments, see e.g., S.
                         1486, § 302, 113th Cong (2013); S. 2629, § 203, 115th Cong (2018); H.R. 756, § 204,
                             th                                          th
                         115 Cong (2017); and H.R. 6076, § 204, 115 Cong (2018). In addition, for shipment of
                         alcoholic beverages, see e.g., S. 1486, § 303, 113th Cong (2013) and S. 2629, § 204,
                         115th Cong (2018).
                         14
                          USPS, Handbook F-66, General Investment Policies and Procedures (Washington, D.C.:
                         September 2018).




                         Page 6                                                        GAO-19-293 Postal Innovations
procedures specifically for major operating expense investments. 15 This
handbook, among other things, establishes requirements and procedures
meant to ensure that new and enhanced products and services
consistently meet customer needs, generate new revenue, and
strengthen USPS as a business. This handbook further states that USPS
has a responsibility to subject new initiatives to rigorous financial analysis,
testing, and measurement, to determine whether these initiatives will
make a positive financial contribution to the organization and ensure that
USPS’s leadership has appropriate information for effective decision-
making.

USPS’s Office of Product Innovation generally has lead responsibility for
piloting innovations. 16 According to USPS’s policies, a project manager is
responsible for establishing and coordinating a cross-functional team to
design and evaluate the pilot. This team typically includes officials from a
variety of USPS departments, such as finance, general counsel,
information technology, marketing, and operations. The project manager,
with support from the cross-functional team, is responsible for preparing a
proposal for the pilot that includes key information, such as the pilot’s
objectives and performance measures, and overseeing pilot
implementation and communication with key stakeholders.

In some cases, PRC has a role in overseeing postal innovation pilots. 17
For example, USPS must notify PRC before it pilots any postal product
innovation for which it will impose a price (i.e., a pilot that generates
revenue for USPS) and must subsequently report quarterly revenue,



15
  USPS, Handbook F-66D, Investment Policies and Procedures — Business Initiatives,
Alliances, Real Estate Development, and Major Operating Expense Investments
(Washington, D.C.: February 2006). A major operating expense investment is an
investment associated with a new initiative, project, or program and may include ongoing
operating expenses associated with the initiative, as well as capital expenditures that may
fall under $5 million.
16
  According to USPS officials, other USPS offices have lead responsibility for piloting
some innovations. For example, the Office of the Chief Information Officer may have lead
responsibility for piloting information technology-based innovations.
17
   The PRC is composed of five commissioners and exercises regulatory oversight over
USPS. It was created by the Postal Reorganization Act of 1970, with expanded
responsibilities under the Postal Accountability and Enhancement Act of 2006. We did not
assess actions taken by PRC to consider and approve innovation pilots, including grocery
delivery and same-day delivery.




Page 7                                                      GAO-19-293 Postal Innovations
                        volume, and cost data. 18 PRC also ensures that certain safeguards are
                        maintained during the pilot, such as limitations on the pilot’s duration and
                        revenue. However, according to PRC officials, the commission has limited
                        involvement in other areas of USPS’s efforts to develop innovations.


                        USPS piloted 24 key innovations from fiscal years 2013 through 2017. 19
USPS Piloted Key        For example, USPS piloted an Identity Verification Service that allows
Innovations Are         users to verify their identity either remotely (i.e., online) or in person at a
                        postal facility. Similarly, USPS piloted an innovation to allow mailers to
Intended Primarily to   print shipping labels, track packages, and schedule package pick-ups by
Generate Revenue or     accessing USPS data. The primary goal of the majority of these key
                        innovations (16 of 24) was to generate revenue, while the primary goal for
Improve Customers’      the remaining innovations was generally to improve customers’
Experience              experience using USPS products or services (see fig. 2). Appendix I
                        includes a complete list of key innovations USPS piloted from fiscal years
                        2013 through 2017.




                        18
                          See 39 U.S.C. § 3641, 39 C.F.R. Part 3035. In September 2014, PRC issued a final rule
                        for conducting “market tests” of “experimental products” that it regulates See Market Tests
                        of Experimental Products, 79 Fed. Reg. 54552 (Sept. 11, 2014). We refer to these tests as
                        “pilots” and products as “postal product innovations” for purposes of our report. In January
                        2019, PRC issued an order amending these rules to revise the method for calculating
                        applicable revenue limitations, among other things. See PRC Order Amending Rules
                        Relating to Market Tests, Order No. 4973 (Jan. 8, 2019).
                        19
                          USPS officials noted that USPS implemented a variety of other key innovations during
                        this time frame, but did not pilot them because the investments carried relatively low risk
                        or implementation cost. For example, USPS introduced High Density Plus, a product
                        enhancement for mailers delivering more than 300 pieces on a single mail route. Similarly,
                        USPS offered annual-mailing promotions (i.e., postal rate discounts offered over a limited
                        period to qualifying mailings) intended to create awareness of innovative uses of mail.




                        Page 8                                                       GAO-19-293 Postal Innovations
Figure 2: Key Piloted U.S. Postal Service (USPS) Innovations by Primary Goal,
Fiscal Years 2013 through 2017




a
USPS stated that the primary goal of one innovation was to improve internal infrastructure.


The following discussion provides additional information about the 4 key
innovations we selected as illustrative examples of USPS’s efforts to pilot
innovative products and services.

•   Same-Day Delivery: From December 2012 to December 2015, USPS
    piloted same-day delivery for consumer e-commerce purchases (see
    fig. 3). According to the pilot proposal, this innovation was intended to
    generate revenue for USPS by allowing it to leverage its existing
    delivery infrastructure to capture part of the growing e-commerce
    market. To determine the potential scalability of same-day delivery,
    USPS first tested its operational feasibility and potential demand in
    several major metropolitan areas, including San Francisco, New York,
    and Phoenix. During the pilot, USPS delivered photos, chocolates,
    water, electronics, and other goods from 38 participating mailers to
    consumers in these areas. At the pilot’s conclusion, USPS decided to
    continue offering same-day delivery to interested participating mailers
    under Priority Mail contracts. 20




20
   According to USPS, as of October 2018, it has signed nine Priority Mail contracts with
eight mailers that participated in the pilot. Priority Mail provides flat-rate 1- to 3-day
expected delivery for domestic parcels.




Page 9                                                             GAO-19-293 Postal Innovations
Figure 3: Snapshot of U.S. Postal Service Website for Same-Day Delivery Product
Innovation




•   Grocery Delivery: From November 2014 to October 2017, USPS
    piloted a grocery delivery product in nine selected metropolitan
    areas. 21 According to USPS, the innovation was intended to generate
    additional revenue by taking advantage of the growing market for
    grocery delivery. To test the innovation’s operational feasibility, USPS
    required the pilot’s sole participating mailer to bring totes containing
21
   Metropolitan areas included San Francisco, Los Angeles, San Diego, New York,
Sacramento, Stamford, Philadelphia, Boston, and the Washington/Baltimore capital
region.




Page 10                                                  GAO-19-293 Postal Innovations
    groceries and other prepackaged goods ordered by customers directly
    to post offices (see fig. 4). USPS was then responsible for sorting the
    totes and delivering them to customers. According to its proposal for
    this pilot, USPS expected grocery delivery to provide a substantial
    revenue generation opportunity. At the pilot’s conclusion, like same-
    day delivery, USPS decided to continue offering grocery delivery with
    the participating mailer under a Parcel Select contract. 22

Figure 4: Illustration of a Tote Used for U.S. Postal Service Grocery Delivery
Product Innovation




22
   Specifically, USPS signed a Parcel Select contract with the participating mailer in
October 2017 that was reviewed and approved by the PRC. According to USPS, Parcel
Select is a ground delivery product for bulk package shipments.




Page 11                                                    GAO-19-293 Postal Innovations
•    Informed Delivery: From spring 2014 through July 2016, USPS piloted
     a notification service called Informed Delivery in Northern Virginia and
     New York. 23 According to USPS, this innovation is intended to bridge
     the gap between the physical and digital worlds by, for example,
     emailing customers with a scanned image of the exterior address side
     of letter-sized mail they should receive later that day (see fig. 5).
     Informed Delivery can also allow mailers to conduct marketing
     campaigns by integrating other elements—such as hyperlinks to
     mailers’ websites—into the email and other notifications that
     customers receive. In its proposal to pilot Informed Delivery, USPS
     stated the pilot was intended to help USPS understand the service’s
     business opportunity and increase the certainty of its potential
     benefits, which included retaining mail volume and generating new
     revenue from large advertisers. In addition, the pilot aimed to
     generate “statistically valid data” on how subscribers respond to
     marketing campaigns that mailers conduct. According to USPS, more
     than 70,000 customers were actively using the service at the pilot’s
     conclusion. In July 2016, USPS decided to end the pilot and launch
     the service nationally. According to USPS, about 13 million customers
     were subscribed to the service as of October 2018. USPS aims to
     have 40 million customers subscribed to the service by 2020.




23
 According to USPS officials, the Informed Delivery pilot did not start during any one
month, but rather was rolled out over a few months during the spring of 2014.




Page 12                                                     GAO-19-293 Postal Innovations
Figure 5: Snapshot of U.S. Postal Service Informed Delivery Notification




•   Keyless Parcel Lockers: Since October 2013, USPS has piloted
    keyless parcel lockers that allow customers to independently pick up
    packages in 98 selected post offices. According to USPS, among
    other things, this innovation is intended to reduce the number of
    missed package deliveries to customers’ post office boxes and
    thereby reduce USPS’s delivery costs (see fig. 6). 24 The purpose of
    the pilot is to assess the performance and use of the lockers and to
    assess their performance. In October 2013, USPS began pre-testing
    the technical performance of 10 prototype keyless parcel locker units



24
   According to USPS, missed deliveries to post office boxes occur when a package is
unable to fit into a post office box and a parcel locker is unavailable, or when package
does not fit into an available locker.




Page 13                                                      GAO-19-293 Postal Innovations
     at post offices in New York City and Northern Virginia. 25 Following this
     pre-test, in February 2015, USPS approved the installation of 50
     made-to-order locker units in selected post offices across the country.
     Finally, in May 2016 USPS expanded the pilot to include an additional
     50 units, including 2 units that a senior USPS official told us were not
     yet installed. As of November 2018, the pilot is still ongoing.


Figure 6: Photo of U.S. Postal Service Keyless Parcel Locker Unit




25
  According to USPS’s proposal for the pilot, a keyless locker unit typically contains 12
individual lockers and is capable of electronically recording inventory and locker use.




Page 14                                                      GAO-19-293 Postal Innovations
                                            USPS’s policies applicable to piloting key innovations fully reflect two of
USPS’s Policies for                         the five leading practices for pilot design and evaluation that we identified
Piloting Key                                in prior GAO work and relevant standards for internal control (see table
                                            1). 26 These policies do not, however, fully reflect the other three leading
Innovations Reflect                         practices due to policy gaps. Further, we found that USPS had not
Some but Not All                            consistently followed its policies to document lessons learned at the
                                            conclusion of each pilot, as discussed below.
Leading Practices for
Pilot Design and
Evaluation

Table 1: Extent to Which the U.S. Postal Service’s (USPS) Policies for Pilot Design and Evaluation Reflect Leading Practices

Leading practices for pilot design and evaluation                                              Assessment of USPS’s policies
Establish appropriate and measurable objectives linked with identified performance measures    Do not fully reflect
Articulate a methodology for evaluating pilot performance                                      Fully reflect
Evaluate pilot performance and identify and document lessons learned                           Fully reflect
Draw and document conclusions about scalability (i.e., determining whether, how, and when to Do not fully reflect
launch the innovation more broadly) based on pilot results
Ensure appropriate two-way communication at all stages of the pilot with key internal and      Do not fully reflect
external stakeholders in order to understand and address their views
Source: GAO. | GAO-19-293

                                            Senior USPS officials acknowledged that gaps exist in its policies for pilot
                                            design and evaluation because they were not developed by USPS to fully
                                            reflect all leading practices. These policy gaps limit the extent to which
                                            USPS can ensure that it is making good resource allocation decisions
                                            based on pilot experiences. Below we further discuss the extent to which
                                            USPS’s policies reflect the five leading pilot practices we identified as well
                                            as how USPS applied these leading practices among the four piloted
                                            innovations that we reviewed.

                                            Establish appropriate and measurable objectives linked with identified
                                            performance measures: We found USPS’s policies do not fully reflect this
                                            leading practice. While USPS policies require that project managers

                                            26
                                              As discussed earlier, we identified leading practices from prior GAO reports on pilot
                                            design and evaluation, including GAO-09-45 and GAO-16-438, as well as from our review
                                            of standards for internal controls related to documentation in GAO-14-704G and the
                                            Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control-
                                            Integrated Framework (2013). USPS officials identified Handbook F-66 and USPS
                                            Handbook F-66D as policies applicable to its piloting of key innovations.




                                            Page 15                                                     GAO-19-293 Postal Innovations
establish pilot objectives and performance measures, they do not require
that each objective be linked with identified performance measures. As a
result, some pilots may have objectives without an associated
performance measure.

For example, although USPS established both objectives and
performance measures for each of the four innovations we selected for
review, it did not consistently link each established objective to
performance measures. USPS’s proposal to pilot same-day delivery, for
example, had objectives of generating new revenue and improving
customers’ experience. However, while the proposal included
performance measures associated with generating new revenue—i.e.,
package volume, gross revenue, and net revenue—it did not identify and
link any performance measures with its objective of improving customer
experience. Similarly, USPS’s proposal to pilot keyless parcel lockers
included improving customers’ experience as one of its objectives.
However, while the proposal included a variety of performance
measures—reduction in the number of missed deliveries to post office
boxes, locker rate utilization, and on-time locker installation—it did not
identify and link any performance measures with its improving customers’
experience objective. Absent such measures, USPS may not know
whether customers have experienced an improvement using keyless
parcel lockers compared to using manual, keyed parcel lockers. Linking
all objectives to performance measures could help ensure that USPS has
the performance information to assess the extent to which a pilot has
achieved all of its objectives.

USPS officials told us that it can be difficult to measure performance for
some objectives related to customer experience. While measuring
customers’ experience can be challenging, it is important to understand
the extent to which a pilot has achieved all of its objectives. Further,
USPS has demonstrated that it can measure improvement in customers’
experience. For example, during its Informed Delivery pilot, USPS
conducted a consumer survey with approximately 5,500 Informed
Delivery subscribers to collect data on consumer adoption and
satisfaction. In the survey, USPS found that over 80 percent were
satisfied or very satisfied with the service. According to USPS officials,
this data helped USPS to measure the pilot’s success in meeting its
objective of improving customers’ experience.

Articulate a methodology for evaluating pilot performance: We found that
USPS’s policies fully reflect this leading practice because the policies
require officials to develop and communicate a methodology for


Page 16                                           GAO-19-293 Postal Innovations
evaluating pilot performance. Articulating such a methodology helps
managers to identify the types and sources of performance information
necessary to evaluate the pilot. 27 USPS’s policies require project
managers to work with the pilot’s cross-functional team to develop and
reach consensus on the methodology. These policies also require the
project manager and cross-functional team to identify data needs, data
sources, and how the data will be evaluated.

For the four innovations we reviewed, we found that USPS articulated a
methodology for evaluating the pilot’s performance. For example, for the
Informed Delivery pilot, USPS identified its customer registration system
as the method for tracking progress toward performance measures
related to the number of Informed Delivery subscribers. Similarly, in its
proposal to pilot keyless parcel lockers, USPS identified its central parcel
locker monitoring system as a method of tracking progress toward
performance measures related to utilization of keyless parcel lockers.

Evaluate pilot performance and identify and document lessons learned:
We found that USPS’s policies fully reflect this leading practice, but USPS
did not consistently follow its policy that requires documenting lessons
learned. Specifically, the policies require project managers to evaluate
performance and document lessons learned at the conclusion of each
pilot. Doing so can enable USPS to identify information needed to make
conclusions about the pilot’s scalability and ensures that such information
will be accessible to inform future related efforts. However, among the
key innovations we selected for review USPS had not consistently
documented lessons learned (see table 2).

Table 2: Extent to Which the U.S. Postal Service (USPS) Documented Lessons
Learned for Key Piloted Innovations Selected by GAO

                                                           Documented lessons learned at
    Key piloted innovations                                pilot’s conclusion
    Metro Post (i.e., same-day delivery)                   Not documented
    Customized Delivery (i.e., grocery delivery)           Not documented
    Informed Delivery                                      Documented
                                                           a
    Keyless parcel lockers
Source: GAO. | GAO-19-293
a
As of November 2018, USPS had not concluded its pilot for keyless parcel lockers.


27
     GAO-16-438.




Page 17                                                          GAO-19-293 Postal Innovations
USPS officials told us that they discussed lessons learned during ongoing
monitoring of pilot performance for these innovations, but had only
documented lessons learned for its Informed Delivery pilot. Specifically,
USPS identified lessons learned in its July 2016 proposal to launch its
Informed Delivery service nationally. In this proposal, we found that USPS
identified some lessons learned about the pilot related to user satisfaction
and adoption rates. USPS officials told us that this information helped to
inform USPS’s decision to launch the service nationally. However, USPS
officials acknowledged that USPS did not document lessons learned for
the other two concluded pilots that we selected for review (same-day
delivery and grocery delivery).

Senior USPS officials told us that USPS had not consistently documented
lessons learned at the conclusion of pilots across the 24 key innovations
because it had not developed tools, such as a template, or training that
could help ensure such consistency. Without consistently documenting
lessons learned for all of its pilots, USPS risks losing information
garnered during pilot implementation that could be relevant to future
innovation efforts. Doing so can be particularly important because,
according to a senior USPS official, officials responsible for pilot projects
sometimes retire or leave USPS for employment elsewhere, creating a
gap in knowledge of pilot experiences. Standards for internal control
underscore the importance of maintaining documentation in order to
retain organizational knowledge and mitigate the risk of having knowledge
limited to a few personnel. 28

Draw and document conclusions about scalability based on pilot results:
USPS’s policies do not fully reflect this leading practice. These policies
require that project managers draw conclusions based on the results and
lessons learned from the pilot. According to USPS officials, conclusions
may include determining scalability—i.e., whether, how, and when to
integrate pilot activities into overall efforts. However, USPS’s policies do
not specifically require that officials document these conclusions.
Documenting conclusions about scalability based on pilot results helps to
ensure retention of organizational knowledge related to the pilot that may
inform future decisions.




28
 GAO-14-704G and Committee of Sponsoring Organizations of the Treadway
Commission, Internal Control-Integrated Framework (2013).




Page 18                                              GAO-19-293 Postal Innovations
Among the three innovations that we selected for review for which the
pilots had concluded (i.e., same-day delivery, grocery delivery, and
Informed Delivery), USPS officials told us that senior leadership
discussed the results and lessons of the pilots and made determinations
regarding whether, how, and when to launch them more broadly, but that
they did not document these decisions or the rationale for them. 29 By not
documenting conclusions, USPS risks losing information that could affect
the success of future related efforts and that could inform future USPS
leadership of the rationale for maintaining investments in activities upon
which pilots were based.

Documenting conclusions for innovation pilots can be especially important
in cases in which USPS decides to continue or expand pilot activities
even when the pilots do not meet all of their intended objectives. For
example, USPS’s same-day delivery and grocery delivery pilots had
revenue objectives, along with associated performance measures;
however, neither pilot achieved these objectives. For the same-day
delivery pilot, costs exceeded revenue in 12 of the 13 fiscal year quarters
in which the pilot was conducted, according to data USPS reported to
PRC. Likewise, USPS data indicate it did not reach its annual revenue
target for its grocery delivery pilot. Similarly, USPS’s pilot of Informed
Delivery was intended to generate “statistically valid data” on how
consumers respond to mailer marketing campaigns. However, according
to a senior USPS official, the pilot did not generate the data as intended,
because no such campaigns were conducted during the pilot.

As discussed earlier in this report, USPS did not discontinue any of these
three selected innovations when their pilots concluded. Although USPS
may have had good reasons to continue with, or more broadly launch,
these innovations despite the pilots not meeting all of their objectives, the
lack of documentation regarding its reasoning and decisions limits
information relevant to whether USPS is making judicious use of limited
resources.

Ensure appropriate two-way communication at all stages of the pilot with
key internal and external stakeholders in order to understand and address
their views: USPS’s policies do not fully reflect this leading practice.

29
  In August 2017, USPS proposed purchasing over 1,400 additional keyless parcel locker
units. However, according to a senior USPS official, USPS did not approve the purchase
because the pilot had not demonstrated that the benefits of providing keyless parcel
lockers to consumers outweighed installation, maintenance, and other costs.




Page 19                                                  GAO-19-293 Postal Innovations
              USPS’s policies require the involvement of key internal stakeholders in
              pilots. Specifically, USPS’s policies require the involvement of cross-
              functional teams—which include legal, finance, and other departments—
              and varying levels of review during the design and implementation of pilot
              proposals. However, USPS’s policies do not address communication with
              key external stakeholders. According to USPS officials, some pilot
              projects may be confidential or have limited or no direct effect on external
              stakeholders and, thus, communication with external stakeholders may
              not be appropriate. While external stakeholder communication may not be
              appropriate with some pilots, such communication, as appropriate, can
              help to ensure that issues critical to the success of a pilot activity are
              identified and addressed.

              Among the innovations that we selected for review, USPS officials
              explained various steps taken to involve internal stakeholders in the
              design and evaluation of the pilots, such as the involvement of cross
              functional teams to develop pilot proposals. Further, while USPS’s
              policies do not address external stakeholder communication, we found
              that USPS employed strategies for some of the innovations we selected
              for review to communicate with some external stakeholders—i.e., industry
              associations and mailers. For example, a representative of a postal
              association told us that USPS shared information and sought input about
              its Informed Delivery pilot during a quarterly meeting with industry groups.
              Similarly, a mailer we interviewed told us that USPS had shared
              information and sought input on the Informed Delivery pilot through direct
              outreach with the mailer.

              However, USPS did not consistently employ strategies to communicate
              with some key external stakeholders among the innovations that we
              selected for review. Specifically, USPS did not design or implement
              strategies to obtain feedback from consumers on its pilots for same-day
              delivery, grocery delivery, or keyless parcel lockers, despite the fact that
              each of these innovations directly affected consumers. In contrast, as
              previously discussed, for its Informed Delivery pilot, USPS planned and
              conducted a survey to obtain consumer feedback, the results of which
              helped USPS project managers support the proposal to expand the
              service nationally. Absent communication with all key stakeholders,
              USPS risks not having a complete understanding of perspectives that
              could inform the viability of its innovations.


              In recent years, USPS has sought to compete in a challenging business
Conclusions   environment by piloting innovations intended primarily to generate


              Page 20                                            GAO-19-293 Postal Innovations
                      revenue and enhance customers’ experience. The policies that USPS
                      uses for piloting key innovations fully reflect some leading practices for
                      pilot design and evaluation, such as articulating a methodology for
                      evaluating pilot performance. However, addressing gaps between
                      USPS’s policies and leading practices related to linking objectives and
                      performance measures, documenting conclusions, and communicating
                      with key external stakeholders would enable USPS leadership to better
                      assess the outcomes of its pilots, understand the rationale for conclusions
                      about scalability based on pilot results, and gauge customers’ reactions to
                      innovative products and services. Moreover, developing tools or training
                      to ensure that USPS consistently implements its policy of documenting
                      lessons learned from pilots would provide USPS with key information to
                      inform future related efforts.


                      We are making the following two recommendations to USPS:
Recommendations for
Executive Action      The Postmaster General should direct the Vice President of Product
                      Innovation to develop policies that fully reflect leading practices for pilot
                      design and evaluation in areas such as linking objectives and
                      performance measures; documenting conclusions about scalability based
                      on pilot results; and communicating with key external stakeholders, as
                      appropriate. (Recommendation 1)

                      The Postmaster General should direct the Vice President of Product
                      Innovation to develop tools, such as a template, or training to help ensure
                      USPS consistently documents lessons learned at the conclusion of pilots,
                      as required by USPS policies. (Recommendation 2)


                      We provided a draft of this product to USPS and PRC for comment.
Agency Comments       USPS provided a written response, which is reproduced in appendix II of
and Our Evaluation    this report. In its response, USPS did not state whether it agreed with our
                      recommendations, but described actions that it plans to take related to
                      each. These actions, if fully implemented, would meet the intent of our
                      recommendations. For example, USPS stated that it would develop
                      policies specifically for pilot design, and would reflect leading practices for
                      pilot design and evaluation based upon best practice research. USPS
                      also noted that it would develop training to ensure consistent
                      documentation of lessons learned from its pilots. USPS added that this
                      planned training would cover best practices for pilot tests.




                      Page 21                                             GAO-19-293 Postal Innovations
Regarding our first recommendation USPS said that pilots are only one
step in a larger process for developing innovations. We agree with this
and noted in our report that piloting is one key element of USPS’s efforts
to innovate. Nonetheless, given USPS’s financial position, effectively
piloting innovations is a critical step to ensure that USPS invests its
limited resources on innovations that are most likely to improve its long-
term viability. USPS also stated that flexibility is important in innovation
pilots, particularly as it pertains to linking pilot objectives with performance
measures. We continue to believe that linking objectives with
performance measures is key to effectively evaluating pilots. In so doing,
however, there is flexibility to adjust pilot objectives and performance
measures as new information is gleaned during the pilot. Finally, with
regard to communication with external stakeholders during pilots, USPS
said that it communicates consistently with external stakeholders
regarding pilots at Mailers’ Technical Advisory Committee meetings
(MTAC). 30 In our report, we noted that USPS employed strategies to
communicate with some external stakeholders—i.e., industry associations
and mailers. We continue to believe, however, in the importance of
communication with all key external stakeholders, which may include
stakeholders, such as consumers, that do not participate in MTAC
meetings.

USPS and PRC also provided technical comments, which we
incorporated as appropriate.


We are sending copies of this report to the appropriate congressional
committee, the Postmaster General, Chairman of PRC, and other
interested parties. In addition, the report is available at no charge on the
GAO website at http://www.gao.gov.




30
  The Mailers’ Technical Advisory Committee is a venue for USPS to share technical
information with mailers and to receive their advice and recommendations on matters
concerning mail-related products and services. The committee holds meetings on a
quarterly basis.




Page 22                                                   GAO-19-293 Postal Innovations
If you or your staff have any questions about this report, please contact
me at (202) 512-2834 or RectanusL@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to this
report are listed in appendix III.

Sincerely yours,




Lori Rectanus
Director
Physical Infrastructure Issues




Page 23                                          GAO-19-293 Postal Innovations
Appendix I: List of U.S. Postal Service Key
Piloted Innovations, Fiscal Years 2013-2017

                                              The U.S. Postal Service (USPS) piloted 24 key innovations from fiscal
                                              years 2013 through 2017 (see table 3). 1

Table 3: U.S. Postal Service (USPS) Key Piloted Innovations, Fiscal Years 2013 through 2017

                                                                                                                    Innovation Primary
Innovation name                 Description                                                                         goal
Metro Post (i.e., same-day      Package delivery product that delivers packages from participating retailers        Generate revenue
delivery)                       to customers in selected areas on the same day.
Customized Delivery (i.e.,      Package delivery product that delivers groceries and other prepackaged              Generate revenue
grocery delivery)               goods from a participating retailer to customers in selected areas.
Standard Post / Retail          Package delivery product that reduces customer costs by providing “zone          Generate revenue
Ground                          pricing” (i.e., lower prices for boxes shipped shorter distances) for less-than-
                                urgent deliveries and oversized packages.
Parcel Return Service pick-     Offering that reduces the number of USPS locations shippers must visit to           Generate revenue
up locations                    pick-up returned packages.
Priority Mail regional rate     Alternative shipping product that reduces customer costs by providing “zone Generate revenue
                                pricing” (i.e., lower prices for boxes shipped shorter distances) for some
                                Priority Mail shipments.
Informed Delivery Platform      Service that provides consumers with a digital preview of their household           Generate revenue
                                mail arriving soon. Mailers can integrate digital campaign elements to
                                engage the consumer.
MyUSPS                          Portal that allows customers to see all packages destined to their address,         Improve customers’
                                create return labels, and request mail holds or redelivery. This feature in         experience
                                now a part of the Informed Delivery platform so customers can see all mail
                                and packages in one place.
Expected Delivery               A service that provides customers with:                                        Improve customers’
                                a delivery timeframe (currently 2 hours) on the day of delivery; and           experience
                                predictions for the expected delivery date and delivery timeframe at least the
                                day before the actual delivery day.
Mobile Check Payment            A service that allows commercial customers to make deposits using a                 Improve customers’
                                mobile device, thereby avoiding the need to visit a retail location, enhancing      experience
                                the customer experience, and expediting the clearance of funds.
Keyless parcel lockers          Lockers installed in some USPS post offices that serve as a “last mile”        Improve customers’
                                delivery point for packages that cannot be delivered directly into P.O. Boxes. experience
Identity Verification Service   A service that would allow users to verify their digital identity either remotely   Generate revenue
                                (i.e., online) or in person.

                                              1
                                               USPS defines “key innovations” as those that have a significant effect on cost, the end
                                              consumer, the shipper, or the mailer. The 2006 Postal Accountability and Enhancement
                                              Act defines (a) postal “product” as a postal service with a distinct cost or market
                                              characteristic for which a rate or rates are, or may reasonably be, applied, and (b) “postal
                                              service” refers to the delivery of letters, printed matter, or mailable packages, including
                                              acceptance, collection, sorting, and transportation, or other ancillary function. USPS
                                              defines an “enhancement” as any improvement to the quality or value of a postal product
                                              or service.




                                              Page 24                                                          GAO-19-293 Postal Innovations
                                                                                                                               Innovation Primary
Innovation name                            Description                                                                         goal
Electronic Postmark                        A service that assures the integrity, authenticity, and accuracy of electronic      Generate revenue
                                           data content.
Priority Mail redesign                     Enhanced Priority Mail product by providing expected delivery, free                 Generate revenue
                                           insurance up to $50, and new packaging.
Parcel Select rural pricing                Enhanced Parcel Select product by developing two-tiered (i.e., rural and            Generate revenue
                                           non-rural) pricing to meeting shipper needs.
Parcel Select next day                     Enhanced Parcel Select product by allowing shippers to drop packages at             Generate revenue
delivery                                   USPS processing plants with lower sorting requirements.
Parcel Select Return Service Enhanced Parcel Select product by expanding the number of USPS                                    Generate revenue
                             locations that accept package returns from shippers.
Click-N-Ship Business Pro                  Developed software that allows mailers to pay postage electronically and            Generate revenue
                                           provides enhanced reporting features for some shipments.
Merchant Return scan base                  Streamlined package returns process by using electronic scan data to                Generate revenue
payment                                    calculate payment in lieu of manually weighing and rating each package.
Developed online tools for                 Developed software that allows mailers to, for example, print shipping              Improve Internal
shippers                                   labels, track packages, schedule package pick-ups by accessing USPS                 Infrastructure
                                           data.
Next Generation Mailbox                    Developed larger mailbox receptacle capable of accommodating more                   Improve customers’
                                           package deliveries and locations with multiple delivery points.                     experience
Informed Visibility / GEO                  Developed software that provides mailers with near real-time end-to-end             Improve customers’
delivery                                   tracking information for some mailpieces and mail aggregates (e.g.,                 experience
                                           containers).
USPS returns automated                     Developed capability to charge for returns based on captured attributes,            Generate revenue
                                           such as capturing package weight from mail processing equipment,
                                           accurately assessing postage, and easily collecting postage due.
Near real time package                     Developed capability of on-street devices used by carriers to transmit mail         Improve customers’
delivery notification                      scan information at the time of the scanning.                                       experience
E-Commerce Program                         A service to enable printing and payment of shipping labels from customers’ Generate revenue
                                           home or office.
Source: GAO analysis of USPS information. | GAO-19-293

                                                         Note: USPS did not discontinue any key piloted innovations from fiscal years 2013 through 2017.




                                                         Page 25                                                           GAO-19-293 Postal Innovations
Appendix II: Comments from the U.S. Postal
              Appendix II: Comments from the U.S. Postal
              Service



Service




              Page 26                                      GAO-19-293 Postal Innovations
Appendix II: Comments from the U.S. Postal
Service




Page 27                                      GAO-19-293 Postal Innovations
Appendix III: GAO Contact and Staff
                  Appendix III: GAO Contact and Staff
                  Acknowledgments



Acknowledgments


                  Lori Rectanus, (202) 512-2834 or RectanusL@gao.gov
GAO Contact
                  In addition to the individual named above, Derrick Collins (Assistant
Staff             Director); William Colwell and James Leonard (analysts in charge);
Acknowledgments   Barbara El Osta; Geoffrey Hamilton; Gina Hoover; Anthony Jackson; and
                  Laurel Voloder made key contributions to this report.




                  Page 28                                       GAO-19-293 Postal Innovations
(102478)
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