A recent article in The New York Times titled "Reading the Writing on the Envelope" paints a grim picture of the U.S. Postal Service. As the second biggest civilian employer in the country (behind Wal-Mart) and the owner of the world's largest civilian fleet of vehicles, the USPS is unable to stop the bleeding caused by electronic communication. Stamped mail is down 47 percent since 2001. Losses were $8.5 billion in 2010 and are projected to be nearly $10 billion in 2011.
In the past year, many shippers have asked NPI how it will affect their transportation spending. Whether your supply chain depends on the USPS or not, here are a few things to consider:
Five-day delivery may be on its way -- and only one option for Saturday ground residential delivery. The USPS has seriously considered eliminating Saturday service, which leaves only one option for Saturday ground residential delivery (FedEx Home Delivery). Depending on your line of business, this could have a negative impact on meeting customer demand. While both UPS and FedEx deliver air packages on Saturday, there is a $15 surcharge and neither carrier delivers ground commercial shipments. Higher demand and limited options will translate into higher costs for shippers.
FedEx SmartPost and UPS Surepost will be affected. If you use either of these options to ship, both will be impacted by any major changes at USPS because they use the USPS infrastructure to deliver.
If you're not already, you should consider regional carrier options. Many shippers are turning to regional carriers who can provide the same service level at a competitive price compared to USPS, FedEx and UPS. With those three carriers caught in the web of USPS indecision, regional carriers are becoming an even sweeter option. However, shippers should be cautious. Many companies lack experience selecting regional carriers and will end up paying more than they need to.
Will any major changes in USPS delivery impact your business? How so? Let us know.
-- John Haber, EVP Transportation, NPI