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In this study we help a state-owned entity that is essentially dying and preparing for a future where it possibly does not exist.
Despite numerous consulting studies since the early 1990’s to prepare for a dystopian postal future ravaged with the scourge of email and the rise of nimble upstarts like Fedex and, eventually, Amazon, the client has posted declining revenues for 17 straight years and no profits for 12 of those years.
Numerous efforts to leverage the assets of the postal service have all failed. A postal savings account initiative failed. Using the mail trucks to map routes and send information back to GPS servers for a fee failed.
Managing delivery for Amazon has led to a surge in volume but a steep drop in margins due to the need to work longer hours and weekends which have driven up overtime pay. Postal branches are aging, the fleet maintenance costs are going up and the pension plan is underfunded.
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The board has decided not to fight the inevitable but to pull back and focus on just a few core areas. The board has endorsed a plan to spin-off/sell promising divisions and use the funds from the disposal/IPO to resuscitate the core postal business and recapitalize the pension plan.
The key part of this entire plan is therefore successfully identifying promising parts of the business and fixing them prior to their sale, which makes this study different from a corporate strategy engagement.
The client wants to restructure the Courier & Freight division before spinning it off to compete against Amazon, Fedex and UPS. Follow the team as they validate the boards’ plan and prepare the division to compete as a standalone company.
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Image from www.GlynLowe.com under cc, cropped, added text.
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