I came across an article last week that caught my interest. It was Harry Whitehouse’s article about the US Postal Service.
Harry notes that when there’s a discussion about shipping carriers, it’s usually about UPS and FedEx. The USPS is invariably left out.
But the US Postal Service delivered 524 million packages in December, compared to 585 million delivered by the UPS and 290 million delivered by FedEx. Whitehouse notes that 28 million packages were delivered by the USPS on just one day alone, December 22.
What many journalists miss is that the shipping world is not what it was five years ago — back when most had written off the Post Office as a bureaucratic dinosaur.
Since then, the USPS has done quite a bit to turn things around. It developed a strategy to reduce its dependence on the First Class letter, and increase small package delivery.
The USPS has updated its technology so that it works with scanners and barcodes, provides package tracking online, improved delivery performance and updated its package insurance. It’s done this to keep up with the demands of online retailers like Amazon.
But the big news is, while FedEx and UPS have been steadily increasing their prices, and adding surcharges for fuel, residential deliveries and dimensional packages, the USPS has trimmed rates and emerged as the best economic option.
For example, say you’d like to ship a 10 lb package from Boston to St Louis. With FedEx 2Day, that will be $46.71. With UPS Ground, that will be $22.05, for a 3 day delivery. Or put your items in a USPS Priority Mail Regional A box (supplied free) and pay the Postal Service $7.55, for a 2-3 day delivery.
There was a time when a FedEx envelope was affordable. Now a 2 lb FedEx Pak via 2Day service can set you back $20.80 – $35.37, depending on distance. Compare that to a USPS Priority Mail flat rate envelope, delivered to most US addresses in 2-3 days, costs just $5.75.
Need a package to go from one coast to the other? UPS and FedEx Ground will take 5-6 days. USPS Priority Mail will take 2-3 days, and probably cost much less.
It’s no wonder that the USPS saw an 18% jump in its December 2014 deliveries from the year before.
Just when everyone thought that USPS was down for the count, it has done exactly what it needed to do: reinvent itself and disrupt the entire shipping industry in the process. Sure, there’s a lot more for it to do, but the USPS is proving that its up to the challenge.
Can FedEx and UPS play catch up? Can they wean themselves off of their pricing models and face their investors? That would be a challenge.
But then again, there’s no better motivator then self-preservation. Just ask the Postal Service.
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