	Background

Declining letter mail volumes and increasing electronic substitution, which  have accelerated with the recent recession, have reduced postal revenues  for both the foreign posts and USPS. Some posts have been experiencing increases in the  number of delivery points every year, at the same time that mail volumes  overall have been declining. Pick Up at Retail Store Counter

Several of the posts we spoke with have partnered with major retailers as  well as individual stores and shops, such as grocery and drug stores, to  provide a number of postal products and services to their customers,  including parcel pick up. Packstations are typically located in high-traffic, public  locations such as train stations. Swiss Post also offered a parcel locker-style delivery option for its  customers. Foreign Posts’ Modernized Retail Networks Have Increased Access to Products and Services, Improved Customer Service, and Reduced Costs

All of the foreign posts we met with have modernized their legacy brick  and mortar retail networks in response to customers’ changing use of the  mail. Posten AB in Sweden has dramatically changed its postal retail network  since 2001, replacing all traditional brick and mortar post-owned and           -operated post offices with partner-owned and -operated retail facilities. All of the posts we interviewed reported positive results as a result of  retail modernization in one or both of two key areas: (1) customer service,  which has improved because, for example, the retail partner is open for  more hours during a day and open on a weekend versus a traditional post  office, and (2) savings in operating and labor costs achieved by closing  post-owned and -operated facilities. Strategies Used by Foreign Posts to Modernize Delivery and Retail Networks Could Help Inform USPS Modernization Efforts

Foreign posts have faced resistance to change and challenges similar to  those USPS faces, and they have developed communication, outreach, and  labor transition strategies to address stakeholder concerns and address  resistance to changes. In some cases, such  as in Australia, when closures or relocation were planned, the affected  community first had an opportunity to propose an alternative. Strategies Used by Foreign Posts Could Help USPS Gain Critically Needed Support as It Plans and Implements Network Modernization Efforts

USPS has taken steps to modernize its retail and delivery networks, but, as  we have previously reported, it faces ongoing challenges related to  legislative restrictions and stakeholder resistance to changes. As USPS moves forward with its modernization efforts, the experiences of  foreign posts suggest that outreach and communication strategies will be  critically important to help it address concerns raised by the public,  Congress, postal unions, and the Postal Regulatory Commission. The Postal  Reorganization Act of 1970 placed requirements on delivery and retail  access standards by mandating that the USPS provide “prompt, reliable,  and efficient services to patrons in all areas and shall render postal  services to all communities” as well as “…a maximum degree of effective  and regular postal services to rural areas, communities, and small towns  where post offices are not self-sustaining.”

Appendix II: Objectives, Scope, and Methodology

The objectives of our work were to describe (1) what major initiatives  foreign postal operators (foreign posts) have implemented to improve or  enhance mail delivery, and what have been the results; (2) what key  initiatives foreign posts have implemented to improve or enhance their  retail network and what have been the results and (3) what strategies used  by foreign posts in their modernization efforts can help U.S. Postal Service  (USPS) as it tries to improve its financial condition and customer service. In addition, we observed a number of demonstrations of foreign posts’  innovations, toured their retail facilities, and received briefings on their  retail and delivery networks, strategic planning, innovation strategies, and  other areas. We reviewed foreign post documentation including annual reports from  2006 to 2010, strategic plans related to retail and delivery network changes  and innovations, reports on postal services and products, fact sheets on  foreign post innovations and initiatives, and sustainability reports and  strategic reviews.
Why GAO Did This Study

The foreign postal operators (foreign posts) in industrialized countries in GAO's review have been experiencing declining letter mail volumes and have modernized their delivery and retail networks to address this challenge. As requested, GAO reviewed the innovations and initiatives that foreign posts are using and the lessons the U.S. Postal Service (USPS) might learn to help it address plummeting mail volumes and record financial losses. This report examines initiatives foreign posts have implemented to improve mail delivery and retail networks and related results, and modernization strategies used by foreign posts that can inform consideration of proposals to improve USPS's financial condition and customer service. GAO selected foreign posts in Australia, Canada, Finland, Germany, Sweden, and Switzerland as case studies based on characteristics, such as delivery and retail changes and country size and location. GAO reviewed foreign posts' documents, including annual reports and strategic plans related to delivery and retail network changes and innovations. GAO met with foreign post officials, toured their retail facilities, received briefings on their delivery and retail networks and other areas, and met with regulators, labor unions, and mailers to obtain their views on the effects of their posts' modernization efforts. USPS generally agreed with GAO's findings and mentioned both its own modernization efforts and the barriers it faces.

What GAO Found

The foreign posts GAO reviewed have developed alternative delivery choices for customers that, according to the posts, have reduced costs and improved customer satisfaction and service. All of these posts now offer digital (purely electronic) or hybrid mail (a blend of physical and digital) options. Some posts offer parcel pick up at retail facilities like grocery stores, which are open longer than post offices, and are often owned and operated by businesses that partner with the posts, thus reducing costs. One post allows customers to pick up parcels from a publicly-located machine, or parcel locker, that is available 24 hours a day. The selected foreign posts have modernized their legacy brick and mortar retail networks in response to customers' changing use of the mail. For example, they have expanded retail access through alternatives such as Internet sales and partnerships with retail businesses such as grocery stores or pharmacies, while reducing the number of post-owned and -operated facilities. According to all of the posts, retail modernization has either (1) improved customer service, in some cases because the partner stays open longer, or (2) reduced operating and labor costs, by closing post-owned and -operated facilities, or both. The foreign posts faced resistance to change and challenges similar to those USPS faces, and they have used strategies that could be helpful to USPS as it moves forward with plans to modernize its own delivery and retail networks. In particular, they relied on outreach and communication strategies to inform public officials and customers of increased access to products and services and help gain acceptance for retail network changes. A few posts also developed labor transition plans or strategies under which they provided training, relocation and job search services, and financial incentives to support employees who were negatively affected by the modernizations. While USPS has taken steps in the past year to generate ideas for modernizing its retail and delivery networks, the experiences of foreign posts suggest that it will be critically important for USPS to fully develop and implement similar outreach, communication, and labor transition strategies.