UPS rolls out new economy ground service for delivery to residential locations
April 11, 2011
UPS recently introduced a new economy ground service for delivery to residential locations.
Entitled UPS SurePost, this service is a “contract-only service that combines the consistency and reliability of the UPS Ground network, from pickup through transferring to the Post Office, with the cost benefits of using the United States Postal Service (USPS) for final delivery,” according to company officials.
UPS SurePost is available from the contiguous 48 U.S. states to the 50 U.S. states, Puerto Rico, Guam, U.S. Virgin Islands, all U.S. territories, P.O. boxes and military APO/FPO destinations.
“The contract service is best-suited for high-volume shippers (think online retailers) who need a basic, cost-effective shipping option for residential deliveries,” said Donna Longino UPS Public Relations Manager. “UPS offers integrated shipping and tracking with UPS SurePost.”
UPS SurePost is, to a large degree, said Longino, is the next iteration of UPS Basic, the company’s highly-targeted, contract-only service, which leverages a partnership with the USPS and has been in existence for several years.
UPS Basic customers are currently being migrated to UPS SurePost, she said.
The fact that UPS has upgrade its UPS Basic to UPS SurePost was somewhat expected,
according to a parcel industry expert.
“It is not surprising to see UPS come to market with a postal induction service to compete head-to-head with SmartPost [FedEx’s “last mile” delivery service partnership with the USPS], as it has been speculated for some time,” said Doug Kahl, Vice President of Strategic Initiatives, at TranzAct Technologies. “And given last year’s launch of Returns Flexible Access, a reverse logistics solution done in conjunction with the USPS, it makes sense that UPS would offer a forward delivery program as well. The timing makes sense.”
With UPS SurePost replacing UPS Basic as the go forward lightweight residential service for UPS, Kahl noted that one key feature change will be that with UPS SurePost more final deliveries will be completed by the USPS than by UPS’s own network, as UPS will drop packages into the USPS DDU (Destination Delivery Network) to complete final mile delivery.
Likely enhancements for UPS SurePost cited by Kahl include expansion from Parcel Select into bound printed matter and media as well.
“I would anticipate seeing price schedules based on these different commodities, not just volume,” he said. “And with the USPS making final delivery, SurePost could be delivered to P.O. and APO/FPO Boxes as well.”
A parcel industry source told LM that as a direct competitor to FedEx SmartPost, UPS SurePost, if executed correctly, can offer greater speed, consistency, and trackability on the hybrid integrator/USPS service.
But he said that he has heard from shippers that UPS is not willing to price below FedEx SmartPost to try to gain increased market share for many of the business-to-consumer market transactions, which tend to normally be more price sensitive than service sensitive.
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