With eight years of fiscal losses in the books, the United States Postal Service (USPS) is turning to e-commerce to boost its money numbers.
“Really it started almost at the level of cold-calling, talking to people who really hadn’t spoken to us in a long time,” said Nagisa Manabe, USPS chief marketing and sales officer, according to Reuters. “And really trying to persuade them to consider us as a very viable alternative in the shipping market.”
This holiday season, experts anticipated a growth of 13 to 14 percent in e-commerce compared to 2013.
“The times are changing,” said Sarah Ninivaggi, a USPS spokeswoman, according to USA Today. “You can see how much people are going online to buy their Christmas gifts.”
The Monday before Christmas, Dec. 22, USPS delivered a record number of packages at 28.2 million. A week prior, on Dec. 15, it delivered 27.9 million packages.
Among USPS’s big customers include eBay and Amazon, the latter for which it makes Sunday deliveries. According to Manabe, “pretty much anyone who’s in the e-commerce space at least does some volume with us.”
ShipMatrix Inc., a shipment visibility software solutions developer, stated that USPS handled 59.2 percent of e-commerce deliveries in 2013, while UPS and FedEx accounted for 31.9 and 8.9 percent, respectively.
But even with its record postings, the expansion of the Internet has hit USPS hard in terms of first-class mail. Between 2009 and 2013, the government mailing agency saw a 20 percent drop in first-class mail deliveries. The decline in this type of mail service was a big part of the reason for its $5.5 billion fiscal loss in 2014.
Mail volume spiraled downward from 2013 to 2014 from 158.2 billion to 155.4 billion pieces, respectively. Of this 2.8 billion difference, 2.2 billion were first-class deliveries.
The mailing service faces competition from other companies like FedEx and United Parcel Service (UPS), but its upper hand is that it already delivers mail to all houses in the United States.
“The U.S. Postal Service has the ultimate last-mile delivery network, so it has a real opportunity here,” said Vinne DeAngelis, vice president of postal relations at Neopost USA, told Reuters.
Analysts estimate USPS can make such deliveries at one-fourth the cost of what its competitors charge.
The mailing agency is also in the process of enhancing its services. For one, it is upgrading handheld scanners used for its delivery workers. And throughout the next four years it plans to invest $10 billion on new vehicles that can handle various package volumes.
At the moment, most of USPS’ vehicles are more than 25 years old and mainly handle mail rather than larger packages.
One issue experts are concerned about is that USPS may encounter hurdles in expanding along with e-commerce because of its unionized employees.
“When I think about the USPS business model, I don’t believe they are ever going to get the productivity of FedEx or UPS,” said Brian Hancock, board member of the Council of Supply Chain Management Professionals, according to Reuters. (With reports from Reuters and USA Today)
(www.asianjournal.com)
(LA Weekend December 27-30, 2014 Sec. D pg.2)
