Subscribe to our free, weekly email newsletter!


USPS looks to move Standard Mail parcels to competitive products category

By Jeff Berman, Group News Editor
August 25, 2010

The United States Postal Service (USPS) recently announced it is petitioning the Postal Regulatory Commission (PRC) to move its Standard Mail parcels from its market-dominant product list to its competitive products list.

USPS officials said if this is approved, fulfillment parcels would become a lightweight subcategory of Parcel Select, a package delivery service geared towards large shippers.

This proposal was part of the USPS’s exigent price case to raise rates filed on July 6. This case is comprised of four-to-six percent price increases for various products, including its 18 Market Dominant products. These changes, if approved by the PRC, would take effect on January 2, 2011. The PRC’s decision is due in early October.

The USPS said the strategy for Standard Mail small parcels redesign would eliminate confusion for customers by breaking this category into two significant and distinct customer segments—marketing parcels and fulfillment parcels. And it said the main difference between the two products is weight, with Standard Mail fulfillment parcels weighing less than 1 pound and Parcel Select prices starting at 1 pound.

Standard Mail fulfillment parcels are heavily used by companies like Amazon, FedEx SmartPost, LL Bean, JC Penney, and many other large volume shippers of lightweight parcels.

“This is a competitive market and there are other shippers in the marketplace fulfilling this need for packages,” said USPS Vice President, Shipping Services, Gary Reblin, in a statement. “This is a logical change and customers will no longer have to navigate two different products and rate structures for one business need.

Parcel Research President Doug Caldwell told LM this move makes sense, because Parcel Select, Priority, and Express are already in the USPS’s competitive category.

“USPS previously had proposed a fairly hefty (20% plus) rate increase for Standard Parcels, since these parcels are a money loser for USPS, only covering 75% of costs,” said Caldwell. “Even with the increase, Standard Parcels will still be a comparatively good bargain. For instance, the proposed Standard Parcel rate for a 15.9 ounce package will be just under $1.04, vs $1.60 for a 1 lb Parcel Select.”

In its recently-released recently released fiscal year third quarter earning, USPS said it incurred a net loss of $3.5 billion compared to $2.4 billion for the same timeframe last year, with operating revenue at $16 billion, a $294 million annual decline. Operating expenses—at $19.5 billion—were up $789 million year-over-year. This is the 14th net loss in the last 16 quarters for the USPS, with its fiscal 2010 year-to-date net loss at $5.4 billion compared to $4.7 billion at this point in 2009.
Mail volume for the quarter—at 40.9 billion pieces—was down roughly 700 million pieces of 1.7 percent.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Transportation stakeholders reliant on North Carolina’s major seaports are welcoming news this week, which outlines plans to enhance the intermodal and cold chain network in the region.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.9 in February, which was 0.2 percent ahead of January and also 0.1 percent ahead of the 12-month average of 56.8. Economic activity in the non-manufacturing sector has grown for the last 61 months, according to ISM.

Non asset-based third-party logistics (3PL) services and logistics technology services provider Transplace said today that Brooks Bentz has joined the company in a newly-created role as president of Transplace Consulting in conjunction with the launch of the company’s new North American consulting services practice.

The advent of e-commerce continues to grow and gain increased traction over time. The many ways for consumers to order and purchase goods online continues to expand and leads to various subsequent byproducts of online purchases, including shopping through multiple channels, and delivery and payment options, among other things. These types of topics serve as the thesis in the second annual UPS Pulse of the Online Shopper Global Study issued this week by UPS and comScore Inc.

A major highlight of CEVA’s fourth quarter performance was its new business wins, which were up 14 percent for all of 2014, with Freight Management wins up 14 percent, and Ocean Freight and Air Freight wins up 30 percent and 14 percent, respectively, while Contract Logistics wins were up 2 percent.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA