Article

The end of the line

In an effort to reduce wait times, increase efficiency and control costs, the U.S. Postal Service is spending more than $100 million on state-of-the-art kiosks.

July 15, 2004

I hate waiting in line. In fact, my aversion to long lines is so strong that I will go to great effort to avoid any kind of wait.

According to Nick Wreden, a customer loyalty expert and author of the book "On An Average Day," by the time we die, the average American will have spent five years waiting in line.

One place I avoid - due to its limited hours and long lines - is the post office. So, whenever I need to mail a package, I will invariably plead with my husband to run the errand for me.

Fortunately for my husband, our local post office just installed one of the new Automated Postal Centers.

In an effort to reduce wait times and increase efficiency, the U.S. Postal Service is spending more than $100 million on the APC program. It plans to deploy more than 2,500 units by the end of 2004 and 10,000 by late 2006 or early 2007.

At a 2003 National League of Postmasters meeting, USPS Vice President of Emergency Preparedness (then the Vice President of Retail) Henry Pankey said, "This self-service platform is aimed at providing our customers with more service. The Postal Service will now offer state-of-the-art kiosks that provide 80 percent of the most common transactions and will be able to do it 24 hours a day, seven days a week and with the same convenience as an ATM."

What is it?

The APC is a self-service touchscreen kiosk that allows patrons to weigh and purchase postage for letters, flats and parcels up to 70 pounds. The APC also prints Information Based Indicia postage for express mail, priority mail, first-class mail and parcel post. The IBI standard is used to enhance the security of postage metering and speed of delivery.

Additional kiosk features include the ability to purchase first-class stamp sheetlets, electronic label and return receipt printing, zip code look-up and the purchase of delivery confirmation service.

At this time, the APC only accepts credit or debit cards - no cash. While the APC can handle most of the same functions performed by counter personnel, it cannot accept packages to foreign countries, handle packages that weigh more than 70 lbs or measure more than 17 inches, insure packages or handle registered mail.

The APC does offer added security features. Similar to going to the counter, the touchscreen prompts users to answer questions such as: Does the package contain anything explosive, flammable, or infectious?

And since the machine only accepts credit and debit cards, a photo of the user is taken once the card is swiped, which means there is less possibility for malicious intent. If someone were to mail a biological agent or bomb, a transaction record would be associated with the package.

Streamlining government services

IBM won the $80.1 million contract for the APC program from the U.S. Postal Service's Supplies and Services Purchasing Division.

"USPS contracted with IBM and IBM selected Pitney Bowes to deliver the revenues collection and secure metering technology needed for this solution," said Brian Leary, Pitney Bowes' director of business and marketing development global product marketing, mail finishing. "The intent for the joint project was to make it easier for customers to access the USPS services and enter mail into the mail stream."

According to IBM's Web site, the APCs are networked to the IBM retail point-of-sale back-end system for transaction handling and are remotely monitored by the U.S. Postal Service for replenishing consumables, and proactively dispatching maintenance and security, all using IBM's Kiosk Manager software.

This approach to equipment service has dramatically reduced replenishment costs versus the traditional approach to scheduled service visits. An additional cost benefit is that shorter counter lines allow postal workers to concentrate on more complex transactions.

Moving into new markets

Because the U.S. Postal Service serves more than seven million customers each day, there is great need for the use of self-service technologies. Based on the APCs' success the USPS is looking to expand the program into in non-postal locations, such as supermarkets, retail stores and other businesses with high-traffic.

USPS is not the only parcel carrier looking to add self-service as part of their parcel delivery services. In fact, several kiosks vendors are working on projects that will offer one-stop shipping from multiple carriers. Of course, none of the vendors want to talk about it "on the record."

What's behind the interest?

According to Scott Koopmans, director of alliances and business development for Pitney Bowes, there are several trends fueling the interest in retail-based and postal shipping kiosks.

1. Each year there are more than 250 million packages sent by small office/home offices (SOHO)and mid-size businesses that don't have daily scheduled pickup service. This group is typically characterized as "low touch" due to relatively small parcel volumes and is most likely to use "on-demand" pickup or go to a retail location to ship a package.
2. The parcel delivery market is the fastest growing transportation segment in the US over the past two decades, more than doubling its share of the nation's transportation budget since 1980 and carrying at least 10 percent of each day's gross domestic product.
3. Growth in package volume shipped is being driven by an increase in online orders. The trend is especially strong due to auctions, returns resulting from online orders, more telecommuters and more SOHO locations.
4. Consumers' online purchases are projected to reach $184 billion by 2004, increasing returns and fueling demand for more convenient residential shipping solutions. A study of online purchasers showed 48 percent would increase their online purchases if it were easier to return merchandise.
5. Convenient ways to ship are in large demand. Convenience involves proximity to home, commute route, and office. It also includes the hours of operation and the degree to which an access point is routinely visited.
6. Self-service kiosks are increasingly accepted among consumers. Postal carriers and retailers have begun to deploy package-shipping kiosks in retail stores and within postal stations.
7. Concerns over space limits and labor make kiosks especially appealing.

What a difference a few years can make

In the mid-'90s kiosk vendor U-Ship International unsuccessfully tried the same concept with its Automated Shipping Centers.

Of course that was before the success of eBay.

Due to the increased demand for expedited shipments, customers now want the ability to ship packages easily and on time. This trend is pushing carriers to continue to look for innovative ways to meet customer needs. And customers have shown that they like the convenience of the APC.

"It's a great project. If you stand there for more than 15 minutes and you watch the customers come in, it's amazing the positive response that you have," said Leary. "I sat near one in New Haven which is one of the first hundred that were installed. Time and time again, for a total of three hours, the response was overwhelmingly positive. I think it has worked out well for USPS."