USPS introduces Parcel Select Regional Ground service

The United States Postal Service (USPS) announced this week it has introduced a new regional ground service for commercial shippers looking for an “economical solution for delivery of small packages.

By ·

The United States Postal Service (USPS) announced this week it has introduced a new regional ground service for commercial shippers looking for an “economical solution for delivery of small packages.

Entitled, Parcel Select Regional Ground, USPS officials said this service offers competitive pricing for high-volume business-to-consumer shippers and provides an “attractive value proposition for delivery of small packages within short-range destinations…[and] provide big savings for qualified commercial shippers.”

In order to take advantage of Parcel Select Regional Ground, the USPS said that shippers must have a customer commitment agreement with the USPS and meet annual volume commitments of 10,000 mailpieces, with each piece weighing 5 pounds or less and measure 0.35 cubic foot or less, as well as be machineable and use an Intelligent Mail package barcode or Confirmation Services barcode.

“This new service is designed as a solution for e-commerce merchants looking to boost sales by offering free or discounted shipping charges for online purchases,” said Gary Reblin, USPS vice president, Domestic Products, in a statement. “It has tremendous appeal for commercial shippers requiring a cost-effective ground service for delivery of packages over shorter distances.”

An industry analyst told LM that this new offering is designed to compete with the fact that for transactions moving to the short-haul—zone 2, 3, or 4—FedEx and UPS now offer guaranteed two-day delivery via their normal ground products.

“The normal solution for the USPS would be priority mail which is not guaranteed and it marketed as a – to-3 day service,” said Jerry Hempstead, principal of Hempstead Consulting. “The focus still appears to be the small to medium sized shipper who has little or no discount with Fedex and UPS for their ground shipping.”

Illustrating an example, Hemsptead said if you take a traditional 5 pound shipment moving to a zone 3 and add the May 2011 fuel surcharge to the FedEx base tariff, the price is $7.68, whereas by using the new regional box offering from USPS, it would cost $6.88. He added that if a shipper has a 25% discount with a commercial carrier for ground then the shipper is going to be charged the minimum plus fuel of $6.09, which is significantly less than the USPS.

The benefits of the USPS product like its other flat rate products is its simplicity,” said Hempstead.  “If it fits, it ships and you know exactly what the cost will be. Additionally the USPS is providing free packaging which is a savings to the shipper, the negative apart from the fact that it may be more expensive to a commercial shipper than a commercial carrier is that the service is not guaranteed. The USPS has had great success with the flat rate priority mail service and this is just a logical extension to attempt to compete with the commercial carriers for short haul shipments that don’t have to transit on an aircraft.”

Doug Kahl, Vice President of Strategic Initiatives, at TranzAct Technologies, said that historically the Parcel Select product has been for high volume shippers who can effectively drop into USPS destination facilities. 

Parcel Select Regional Ground, he said, is designed to put smaller volume shippers into play.  A 10,000 annual volume commitment works out to about 40 packages per day.  The region footprint covers the local zone through zone 3, that should roughly cover up to 300 miles.  And entry is based on origin, not destination facility.

“The next step for lower volume, regional shippers would be to contact their Postal Business Representative to confirm if there is a designated origin facility in their area,” said Kahl.

For related articles, please click here.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
The Cloud Supply Chain Data Network
Understanding the Power of a Shared Online Network to Connect Global Partners and Achieve High Data Quality Levels
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Digital Evolution: Streamlining Logistics and Supply Chain Operations
In this FREE virtual conference we'll define the challenges facing operations and offer solutions designed to create dynamic, automated networks that offer seamless communication, improved collaborative third-party relationships, and the ability to respond to changes at a moment's notice.
Register Today!
EDITORS' PICKS
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....

25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...