Emery, USPS partnering in dock-to-home delivery

By Staff -- Logistics Management, 9/1/2000

The U.S. Postal Service and Emery Worldwide, the global heavyweight aircargo subsidiary of CNF Inc., are partnering in the "Parcel@Home" dock-to-residence service aimed at shippers of high-value computers and home electronics. The service will specialize in home delivery of multiple-piece shipments whose pieces weigh up to 70 pounds.

Parcel@Home combines Emery's heavyweight aircargo fleet with the Postal Service's reach, which extends to "virtually every home address in the United States," according to Emery CEO Roger Piazza. Emery expects the business-to-residence delivery market to experience substantial growth as more consumers buy goods online and through catalogs, he says.

Emery is not the first air carrier to forge an alliance with the Postal Service for this type of business. Rival Airborne Express launched its @home service in July 1999, targeting new business from e-tailers and catalog-fulfillment providers.

The partnership calls for Emery to pick up palletized shipments from a customer's distribution center or factory, then fly them to its Global Sortation Center in Dayton, Ohio, for processing. The shipments are then delivered to regional USPS facilities for ZIP-code sorting en route to home delivery through USPS's extensive residential network, which serves 130 million homes. Shippers can choose two-, three-, or four-day residential delivery. Electronic delivery confirmation and full traceability are among the services offered.

The new delivery service is getting a mixed reception in the marketplace. An analyst report from Bear Stearns of New York praises Emery for coming up with a plan that gets Emery into the fast-growing business-to-consumer (B-to-C) market by using a structure that the company already has in place. But the report also notes that Emery's B-to-C market is negligible, and it is critical of the deal because of the carrier's dispute with the USPS over a contract to deliver Priority Mail.

Emery spokesman Rocco Sacci says the confusion over the new USPS deal stems from two misunderstandings. First, the Emery contract for delivery of Priority Mail is between the USPS and Emery Worldwide Airlines, a separate operating company. And the new deal between the Postal Service and Emery Worldwide is a partnership, not a contract, with the cargo carrier providing service on an as-needed basis, he says. Parcel@Home is designed to benefit shippers who want to use the USPS bulk-rate discount without having to pay the Postal Service up front for each delivery-an accounting nightmare, Sacci continues. Under the new service, he explains, shippers can contract with Emery, then piggyback on the USPS delivery system.

The dispute between the USPS and Emery Worldwide Airlines stems from a 58-month, $1.7 billion contract signed in April 1997 to sort and transport Priority Mail . "It's a dispute over pricing," Sacci says. "How it's going to be resolved remains to be seen." Other Emery companies also provide services to the USPS, he says, including overnight air transport of express mail and transport of first-class mail on a space-available basis.