Assessing Risk of a Top U.S. Service Provider

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What if one of your top suppliers just defaulted on a multi-billion dollar payment? That’s pretty much what happened recently when the U.S. Postal Service defaulted on $5.6 billion that it is legally required to pay the federal government to cover its future retiree healthcare benefits.

To many large and small companies in the U.S., the USPS is one if their major service providers. To those companies using the USPS for package and mail delivery, the possibility that one of its major suppliers would go out of business may seem far-fetched. However, the risk assessment of the USPS delivery system’s financial viability may warrant a closer look.

If your company relies on the USPS delivery infrastructure to transact business, notify customers, collect money, or any other paper-based communication, it should be a component of any firm’s long range planning and risk analysis. Just as companies have assessed the impact of many variables including fluctuating commodity prices, weather patterns, social/economic trends and other macro environmental factors, those companies depending on the USPS for most of its customer communications should consider the risks.

This is not an alarmist view; it is pragmatic to think about the acceleration of digital communications, and all of the other electronic means by which today's and tomorrow’s customers are interacting. As technology advances, and legacy systems, which were designed more than 50 years ago, are replaced, it is incumbent on the companies who rely on the USPS to evaluate the impact of a USPS service disruption. No one is saying that the USPS is going out of business, but in light of technological advancements and alternate information delivery platforms, it is wise to consider some “what if” scenarios in the event the USPS changes its service levels and rate structure.

Do you consider the USPS to be one of your significant vendors?

Have you thought about the financial and operational viability of the USPS and its impact on your business?

How many of your workflows and processes are dependent on the USPS delivery model?

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