There are real opportunities for the Postal Service to earn income from its real estate portfolio, upgrade its infrastructure, benefit from private sector innovation, and make its cost structure more variable so costs decline with volume.
Public-Private Partnerships have helped postal operators reduce the costs of universal service and leverage the skills of private businesses. The posts use a wide variety of PPP models successfully, including franchising, co-location in private retail facilities, and sale and leaseback agreements.
Foreign posts have used PPPs to lower or eliminate fixed costs in retailing, real estate, and fleet management. Turning these fixed costs into variable costs allows them to decline along with mail volume.
A key lesson from U.S. states and foreign governments is that there are benefits in centralizing and professionalizing PPP expertise and best practices.
The Postal Service has experience with PPPs in several functional areas, but does not use a cohesive PPP strategy or operational approach.