Consolidating Delivery Units

The Postal Service has announced that it is considering consolidating delivery operations into fewer locations in the Syracuse area.  The consolidation of delivery operations has received little attention in discussion of streamlining the Postal Service network but may be as important to mailers that drop-ship and the competitiveness of the Postal Service's parcel services.  

Consolidating delivery operations increases the number of delivery points served by a single delivery office.   This reduces the cost of companies drop-shipping mail by reducing the number of stops that they would have to make to serve the delivery points prior to consolidation.   By reducing the number of stops, the consolidation increases the likelihood that dropping to a particular delivery unit would be economically viable for the mailer / parcel consolidator.  Consolidation could make products that are drop shipped to carrier stations even more attractive in periodical, advertising mail, and parcel markets as they reduce the mailer's transportation costs and increase the probability that their mail/parcels will qualify for the lowest drop-shipment rates.

The advantages to the Postal Service of consolidating carrier stations is less clear.   While the Postal Service will save some transportation costs in moving mail from processing centers to delivery units, it will occur additional transportation and labor costs associated with longer drives from carrier stations to carrier routes.   It is possible that there would be some savings associated with in-office labor, supervision, management costs, and facility costs especially if the Postal Service can move the retail operations to a smaller location dedicated to retail services.

Consolidating delivery operations may be under consideration in Syracuse because one or more of the facilities involved is large enough to accommodate more carriers.  Consolidating delivery in other locations might be possible depending on the availability of space. 

Investing in a new network of delivery units should be investigated in locations beyond Syracuse even if the cost savings are minimal because of the potential that consolidation offers for making Postal Service drop shipped products more attractive to mailers.