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

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