Parcel Shippers: New USPS Priority Mail Undercuts UPS and FedEx Pricing!
In short, UPS and FedEx ground pricing in 2015 will look more like the Postal Service, with the exception that the latter offers balloon rates for inner zones and the more favorable DIM divisor of 194 for outer zones and only if the package exceeds one cubic foot (1,728 cubic inches).
Other USPS Advantages
The USPS enjoys many unique advantages over national, private carriers like UPS and FedEx. USPS already goes to every door, every day. Other carriers often need to make an additional stop, especially to residences. The USPS simply drops off parcels with the rest of the mail.
The Postal Service is the only carrier that can put items in mailboxes, PO boxes or residential mail slots. It's the only choice for the 20 million APO, FPO and PO boxes that the private carriers can't deliver to.
The USPS offers free package pickup six days a week. With tens of thousands of Postal Service-managed retail offices in nearly every community in the U.S., the USPS offers the most package drop-off points in the country.
The USPS has significantly fewer accessorial charges. It delivers to every address for the same price, whereas its competitors impose extended area charges, residential delivery fees, fuel and many other surcharges.
Moreover, USPS doesn't charge for Saturday delivery. Free Saturday delivery amounts to 52 additional delivery days a year. Plus, it's the day residential customers are most likely to be home, eliminating the need for more than one delivery attempt, increasing customer satisfaction and reducing customer service calls.
Other advantages include the fact that the USPS offers free packaging and package pickup, and is the only carrier that offers First Class pricing for parcels that weigh under a pound with delivery service standards within one to three business days. (Note: parcel consolidators like UPS Mail Innovations, UPS SurePost, FedEx SmartPost and others do offer ounce-based pricing with induction back to the USPS for final-mile delivery).
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.