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 Department of Commerce reported that January retail sales were up 0.2 percent compared to December and up 3.7 percent annually at $449.9 billion, and the NRF reported that January retail sales, which exclude automobiles, gas stations, and restaurants, rose 0.6 percent over December and 1.4 percent compared to January 2015.

On the freight shipments side, Cass reported that January shipments––at 1.025––trailed December by 1.3 percent and January 2016 by 0.2 percent. These declines were less than the 4.9 percent drop from November to December, though, and January shipments still topped the 1.0 mark for the 65th straight month in December.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that its Freight Transportation Services Index (TSI) saw a 0.4 percent decline from November to December, its second straight decline on the heels of a 1.0 percent decrease from October to November.

Carloads saw a 11.7 percent annual decline at 241,680, and intermodal containers and trailers rose 10.5 percent to 262,830

An amendment to the International Maritime Organization’s Safety of Life at Sea convention will go into effect requiring all shippers (importers and exporters) to certify and submit the Verified Gross Mass – the combined weight of the cargo and the container – to the steamship line and terminal operator in advance of loading the container aboard a vessel.

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA