Subscribe to our free, weekly email newsletter!


USPS to shutter LTL market test, effective September 19

By Jeff Berman, Group News Editor
August 22, 2011

In early 2009, the United States Postal Service (USPS) stated its intent in a filing with the Postal Regulatory Commission (PRC) to launch a market test to provide service akin to a less-than-truckload (LTL) network.

But in a filing submitted to the PRC on August 19, the USPS said it intends to shutter this initiative—it entitled “Collaborative Logistics”—on September 19.

According to the filing, the USPS planned to make its LTL service a permanent product offering “in light of its favorable reaction to the results of its market test.” Now, though, it explained it has been forced to reevaluate its plans based on changes in its organizational structure, its current financial condition, and operations concerns (the USPS ended the third quarter of fiscal year 2011 with a net loss of $3.1 billion, compared to a net loss of $3.5 billion for the same period in FY 2010).

It added that area mail processing and other consolidation activities have resulted in significant opportunities to reduce transportation, with management determining that resources should be devoted to consideration of initiatives to consolidate facilities and transportation to reduce costs. And it also said that aggressive cost cutting measures will impact revenue opportunities for Collaborative Logistics.

On September 19, expiring contracts for this initiative will not be renewed and other contracts will be terminated, with the USPS expecting that by this date all customer agreements will have concluded. The USPS will consider revisiting LTL services as a permanent product in the future depending on financial and operational conditions and “evaluate the successes and challenges of the Collaborative Logistics market test over the coming months.”

An industry source told Logistics Management in 2009 that this plan made sense on various levels, considering the USPS has plenty of excess capacity on the roads at the moment with a network that is already delivering mail on a daily basis. And he added that if viewed as an LTL player, the USPS has a bigger LTL footprint—or network—due to its existing mail routes.

“There is no place the USPS does not go,” explained the source.

However, the catch for shippers is that they would need to determine how to get freight to and from the USPS sectional center facility or bulk mailing center. This presents an opportunity for third-party integrators to take an active role in delivering and picking up freight and then collect and deliver it to a consignee.

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

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

The current status of FedEx’ planned acquisition of Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion, which was initially announced in April, remains in flux, with continued actions being taken by the European Commission.

Panjiva said that the 1 percent sequential growth was in line with typically flat growth from May to June, as higher monthly growth typically takes hold in July and August in advance of the holiday season.

Hackett officials described this new offering as a short-term index that offers up “the sentiment for trade at a glance,” akin to other key economic metrics like the PMI and Consumer and Carrier confidence indices, while providing access to specifically see where a group of economic indicators are in relation to trade for the current month, too.

While many industry analysts contend that distribution centers near U.S. East Coast ports will see a surge of new business after the Panama Canal expansion, real estate experts say this phenomena is already underway.

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