Thursday, August 27, 2015

What Can 'Blue' Do For You?

Post Office delivers increasingly attractive alternative for B2C service.

When it comes to parcel delivery in the U.S., many supply chain managers have an instinctive reaction that includes just two sources – FedEx and UPS. While this may be fine with the “duopoly,” it overlooks a significant competitor who can provide the two corporate giants with some much-needed competition, and give shippers an edge over their own competition. Instead of just Brown and Purple, think “Blue,” as in red, white and blue, the familiar (and oft-maligned) United States Post Office. FedEx and UPS do – they use Post Office trucks for “last mile” delivery on a regular basis, taking advantage of the ubiquity of the USPS delivery trucks.

“We hit every address in the country, six days a week,” said Dennis Nicoski, manager of field service and contracts for USPS, speaking to Supply Chain Brain. Historically, first class mail was the backbone of Post Office revenue, but Nicoski was frank about the prospects of that stream for the future. “We don’t expect first class to come back, with electronic bill payment and email. The Post Office needs package service to stay viable.”

The Post Office has worked to upgrade their small package offerings, with major investments in improving tracking and shipment visibility in the last five years. They proactively added Sunday delivery last holiday season to keep up with surging demand, at a time when the duopoly was getting slammed for late deliveries. The USPS efforts received a boost when FedEx and UPS went to DIM weight pricing for all their shipments, amounting to a major backdoor price increase.

“We’ve seen packages shift to us,” said Nicoski. “We had a very successful 2014,” with an 18 percent increase in volume over 2013. “We’re very well prepared for 2015 (holiday shipping).” Looking ahead, USPS is sketching out the mailbox of the future, which could include features such as larger size, temperature control, and “smart” electronic notification.

There’s no need to wait for an uncertain future to expand your horizons on small packages. When considering B2C service, why not see what Blue can do for you? 

Kirk Shearer
800-989-0054 x103

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