The U.S. Postal Service (USPS) has reeled in two unlikely users for its "Parcel Select" service, the package-delivery program designed to take large-volume shippers and consolidators "the last mile" at an economical price.

Over the past few months, UPS and FedEx have been testing Parcel Select and are now rolling out economy products of their own that incorporate the service for deliveries to the front door. That allows the carrier giants—acting as consolidators—to offer inexpensive products aimed at large-volume customers that don't need expedited delivery.

USPS launched Parcel Select during the late '90s as a cost-effective way to handle increasing package volumes from Internet-based retailers and catalogers. Parcel Select shippers choose to enter their 200 or more parcels into the USPS system at one of three stages: at a destination bulk mail center (DBMC); at a destination sectional center facility (DSCF); or at a destination delivery unit (DDU), or local post office. Rates are determined by the level at which the parcels enter the system, with the DDU rate being most economical.

"The choice of levels helps the shipper control the time of delivery and get a higher degree of predictability and reliability," says Nicholas Barranca, USPS vice president, product development. "We've seen a tremendous migration to Parcel Select," he adds. "There's predictability and reliability, but most of all it's an attractive rate."

UPS has folded Parcel Select into its new "UPS Basic" service, which it will offer to certain types of shippers. "This is not a general offering," says spokesperson Norman Black. "It's very specific to reach new customers that are extremely price sensitive and not so worried about guaranteed time—they simply want something to show up at their customer's doorstep or mailbox." UPS will largely use the postal service for rural deliveries, he adds.

FedEx, meanwhile, expects to complete beta testing of a new service incorporating Parcel Direct at the end of May, says Communications Specialist Jess Bunn. The carrier will assess the service's performance at that time and will consider adding it to its existing product lineup.