Mail volume continues to decline as the agency grapples with
the need to update its supply chain in order to be competitive. Sadly it is
still stuck in the mid-20th century and appears it will remain
there. The USPS has introduced a five year plan to Congress but unfortunately
this is an election year and for many congressmen, seriously taking up this
legislation could result in negative backlash from not only constituents but
also from labor unions especially if congressmen vote for the requested post
office closings, layoffs and changes in compensation.
The USPS has steadily been losing more and more market share
to the likes of UPS and FedEx, the two largest providers of small parcel
delivery in the US. Even though both UPS and FedEx rely on the USPS for final
mile delivery for some of their services such as SmartPost and SurePost, this
is not enough to sustain the agency.
Opportunities are being missed such as the explosive growth
of ecommerce. Yes, both FedEx’s SmartPost and UPS’ SurePost targets this growing
demand, however, the USPS needs to take advantage of this growth opportunity,
promote its solutions and perhaps offer a specialized solution to rival those
of FedEx and UPS – one in which would keep the package in one network instead
of one that travels through a UPS or FedEx network and then is placed in the
USPS network for final mile - thus easier to track and monitor.
There does seem to be some USPS solutions for the ecommerce
space such as web tools for integration into websites. Its’ flat rate boxes are
also promoted as another solution. These are not enough and the possibility of
ending Saturday delivery and the recent announcement of ending international
delivery of lithium batteries will further hurt the agency.
Saturday delivery could be a competitive advantage for the
USPS, particularly for ecommerce deliveries. Currently, UPS and FedEx weekend
deliveries are an additional charge. Consumers that order online are typically
an impatient group and expect their packages to arrive within a two day
delivery period on average, particularly if they have to pay for shipping or if
they take advantage of special services such as Amazon.com’s Prime membership.
This past week, the USPS announced they would suspend
international shipments of lithium batteries (this includes all overseas
military bases). This will affect smartphones, laptops, cell phones and
tablets. Transportation of lithium batteries on air cargo carriers has been
debated over the years due to the instable nature of the battery. While caution
is admirable, UPS and FedEx continue to transport these batteries and electronic
goods. Much of ecommerce is centered on such electronic goods. UPSPS stated it
would lift the ban in 2013 when regulations are implemented. By then it will
probably be too late for the agency. UPS and FedEx will gain additional shipments
as a result of this ban.
To the US Congress – allow the USPS to implement its 5 year
plan (but keep Saturday delivery). Although not perfect by a long shot, it is
one in which will help keep the USPS afloat a while longer and offer another
option for those shippers looking for an alternative to UPS and FedEx.
