12.24.14 (Reuters) – Facing a slump in the mail it had been delivering since the days of America’s Revolutionary War, in 2012 the U.S. Postal Service began aggressively targeting e-commerce and lapsed customers as the way to salvage its declining business.
“Really it started almost at the level of cold-calling, talking to people who really hadn’t spoken to us in a long time,” said Nagisa Manabe, who joined the USPS in May 2012 as chief marketing and sales officer from Coca-Cola Co after a career in the private sector. “And really trying to persuade them to consider us as a very viable alternative in the shipping market.”
With further drops in its traditional bread-and-butter products ahead, the USPS wants to capitalize on e-commerce, which consulting firm Detroit LLP has predicted should grow 14 percent this holiday season alone. But industry experts question whether the USPS has enough space in its delivery vans and whether its unionized work force can handle a greater proportion of the e-commerce market.
Over the past two years the USPS has rolled out real-time scanning for packages, a vital tool for online retailers and consumers alike to track their packages. It is also upgrading all of its delivery workers’ handheld scanners.
The rise of the Internet has taken a heavy toll on first-class mail, the USPS’s most profitable product. That falling business played a significant role in the USPS’s fiscal 2014 loss of $5.5 billion, its eighth consecutive year in the red.
From 2009 to 2013, the volume of first-class mail deliveries dropped more than 20 percent. In the fiscal year ending Sept. 30, USPS deliveries declined to 155.4 billion pieces from 158.2 billion. First-class deliveries accounted for 2.2 billion pieces of that decline.
But package deliveries rose to more than 4 billion pieces from 3.7 billion, accounting for $1.1 billion of the USPS’s revenue growth of $1.9 billion. In the run-up to Christmas, the USPS has been doing Sunday deliveries for Amazon.com Inc in a number of cities. Manabe adds that the agency will handle the online retailer’s push into same-day and next-day deliveries “in many markets.”
EBay Inc is another major customer and Manabe says “pretty much anyone who’s in the e-commerce space at least does some volume with us.”
FLEET OVERHAUL
Many in the delivery industry are waiting to see how the USPS has handled surging e-commerce volumes in the days before Christmas.
The USPS’s competitive advantage lies in the fact that it already delivers to every house in America and analysts estimate it can do so for around a quarter of the cost charged by United Parcel Service Inc and FedEx Corp, which are both competitors and customers of the USPS.
“The U.S. Postal Service has the ultimate last-mile delivery network, so it has a real opportunity here,” said Vinnie DeAngelis, vice president of postal relations at Neopost USA, which provides tracking and other software for e-commerce retailers and delivery companies.
The USPS plans to spend more than $10 billion over the next four years on a new fleet of vehicles. [pr added link] Manabe said that could mean three or four different sizes of vehicles to handle different package volumes in urban and rural areas.
Some industry experts are concerned that the USPS, whose operations are dictated by Congress, may have trouble handling e-commerce growth due to its quasi-government unionized workers.
This year was bad for tracking. I had packages sitting for three days before movement and then they were in my town. I had packages delivered in the morning and notified of same that night. I am just glad I got any of them. These were all “last mile” deliveries from the post office and I talking about maybe a half dozen packages.
How come they always make it sound like we are loosing 5.5 billion because of mail volume and not because of the Bush era pre payments for retirees that have not even been born yet?
Average PS Lightweight $1.10, average PS $2.58. Postal workers (non pse, cca) make 45ยข per click with benefits. You do the math.
Yea great they are going after the package business but they better do a hell of a lot better job then this year.I am a retired letter carrier who sells on line and the tracking of packages this December has been terrible. I watch my clerk scan my scan sheet and nothing ever shows up. I have been told by a supervisor that the system could not handle all the scans. And that they in the cloud somewhere. So they better upgrade there software because they will differently lose business if this continues.
The USPS may succeed in the new e-commerce world, or snatch defeat from the jaws of victory thanks to continued blind stewardship, corruption and suicidal intentions of closing 82 plants despite cries from everybody involved outside of management itself to not do so.
There is an arrogance and indifference management shows toward its customers and workers, not to mention Congress that borderlines on psychotic. It’s the “good ol’ boy” syndrome carried to extremes, populating the highest levels with incompetents who got where they are through ass kissing, snitching and nepotism. Even those who come from other industries I’ll bet are ignored.
Can carriers handle a more parcel oriented business? Of course we can. The concerns however with vehicles are legitimate ones. LLV’s are not big enough, don’t have racks in pack to stack parcels, making us just line up parcels in somewhat of a delivery order as best as we can, with parcels flying all over the back end because there’s no way to keep them stable. You can’t stand up in the back, only stoop, and that causes at least for me incredible back pain because I, like tons of other carriers, have blown disks from 30 years of being a pack mule. Not to mention three surgeries since 2008 that were all related to wear and tear.
I’ll retire before I see a new truck. The old ones are deathtraps, gobble gas like the Tasmanian devil gobbles bunnies, get up over 125 degrees in the summer and blow hot air out the vents all the time, if the heaters don’t conk. Hell, we have to carry a portable radio or some carriers listen to MP3 players on the route, which I don’t advocate any more than I approve text messaging while driving. But would it kill the PO to put in an AM/FM radio? Probably.
Plus, our trucks up next to FedEx or UPS vans, which are replaced regularly, look like dog shit. Decals are worn off, there are scrapes, dents, paint faded and rusty fenders. It’s embarrassing, and should be to management but they have no shame and send out low level flunkies to watch us, provided the weather is clear and about 75 degrees. Oh well, some things will never change.
eCommerce, what a great idea !
After all, the USPS has a fantastic track record of online security of personal info………………….wait, what ?…………….
Yeah right you all let a small trucking company that treats their workers with a 1000.00 Christmas bound these the drivers for about 5 years now and the USPS a government company don’t give nothing not even a 25.00 ham or turkey you should be ashamed of your self but you hire the worse people to be a boss or in charge of others if you would hire the right people you would not hurting for money than Mabel you afford a Christmas bouns to people that does a good job .
Sadly, less than 45% do a good job and less than 1% deserve a bonus. Would be terrible to only give a bonus to the deserving as 99% would feel bad,,, deservedly so.