USPS to shutter LTL market test, effective September 19

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.

By ·

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, 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...