The Postal Service Emerges as Shipping Powerhouse for Small Businesses An old competitor to UPS and FedEx has stepped up to deliver America's packages, leveraging technology and adjusting pricing.
By Harry Whitehouse Edited by Dan Bova
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The other week I was reading an article about how shipping carriers fared over the holidays. FedEx and United Parcel Service were mentioned, but noticeably absent was the U.S. Postal Service.
As someone who works closely with the U.S. Postal Service and developed technology to print its shipping labels from home, this baffled me. The postal service delivered 524 million packages in December (an 18 percent increase over 2013) versus UPS and FedEx's projected 585 million and 290 million respectively. (The latter two companies haven't released their figures yet.)
Of that 524 million, a record 28 million were delivered in a single day -- December 22 -- ensuring that packages arrived in time for Christmas. So why then when people speak about shipping carriers, is the postal service mentioned as an afterthought, if at all?
Related: France's Postal Service is Experimenting with Drone Mail Delivery
There's a tendency to discuss shipping in terms of the Big 2 instead of the Big 3. So I want to set the record straight: Today's postal service is just as capable of package delivery as FedEx and UPS.
In fact, the U.S. Postal Service has transformed itself from a humble mail carrier to a package delivery powerhouse, and if businesses fail to notice this change and adopt it as a part of their shipping mix, they will lose money in the long run.
Furthermore, I predict that 2015 will be an innovative year for the postal service. What's fueling the innovation? Competition both from tech disruptors and from FedEx and UPS.
Both Google and Amazon made aggressive moves to build up their delivery fleets last year. Google Express, which lets people buy from local retailers and have those products delivered the same day, expanded to five new regions, bringing its coverage area to seven metropolitan markets.
At the same time, Amazon made headlines by testing a personal delivery network for the last mile (the ultimate leg of a package's journey before reaching a customer's doorstep), giving the ecommerce giant full control over the shopping experience, from purchase to final delivery.
The fact that Google and Amazon are expanding their delivery services forces the postal service to be more inventive.
Quietly, the U.S. Postal Service has been enhancing its resources to do just that. One example is that it has equipped its trucks and carriers with GPS-enabled scan guns that can provide real-time updates to the cloud. With this technology, the postal service can pinpoint a truck's location and determine its availability to make additional pickups and drop-offs.
Additionally, U.S. Postal Service is beginning to employ dynamic routing for package deliveries. It used this heavily the last holiday season when it delivered packages seven days a week. This protocol decides the most efficient route for a vehicle based on the packages in the truck rather than using the classic "fixed carrier route" model.
The development of this technology is in direct response to delivery disruptors and will enable the postal service to provide better package tracking, as well as new services like grocery delivery.
Related: The U.S. Postal Service Just Got a Side Hustle Delivering Groceries. Do You Have Another Gig?
Innovative shipping solutions and technology make up just one sector where U.S. Postal Service is growing. The other is in its services and pricing.
Until recently, the postal service typically offered the most affordable rates for packages weighing less than 10 pounds. But in September, the postal service lowered its rates for Priority Mail, extending its affordable pricing options to packages weighing as much as 40 pounds.
This move signals the intent of the postal service to compete with FedEx and UPS head-on by targeting the weight classes that they typically deliver the most. Plus, with UPS's and FedEx's expansion of dimensional weight pricing (charging based on the size of the package, regardless of weight), many businesses that ship large, lightweight packages will probably turn to the U.S. Postal Service as a lower-cost alternative.
A December survey of 700 customers by my company, Endicia, found just that: Eighty percent of the businesses surveyed claimed they will use the U.S. Postal Service for their larger, lightweight shipments now that dimensional weight pricing has come into play.
The U.S. Postal Service delivery services and low pricing -- coupled with its breadth of network and tech initiatives -- can provide a competitive advantage to businesses shipping goods to consumers.
Savvy business owners will take advantage of the postal service and keep an eye on the changes it rolls out this year.
The postal service has changed and is every bit as capable of package delivery as FedEx and UPS and offers tracking capabilities on par with these carriers as well. And if you don't take a closer look, you're leaving money on the table.
Related: UPS Ups Its Shipping Game
