June 2 2008 09:17 AM

After Reform & Rate Adjustments

Looking into the New U.S. Postal Service

By Johanna Boller


Postal reform passed in December, a new rate case is proposed for May, and new rules about address quality are expected in August. That is a lot of change for the Postal Service in a compressed period of time, and it is a great reason to take a fresh look at the U.S. Postal Service as a partner for your package and document shipping needs.


The USPS has been on the move to keep package rates and service offerings simple and easy to use and to promote their key areas of rate differentiation. The most recent rate adjustments maintain that tradition. The Priority Mail Flat Rate Box is an excellent example. Not only can you be assured of one low, fixed rate across all zones, regardless of weight, and delivery in two to three business days, but there are also no fuel surcharges, no residential delivery surcharges, and the boxes are free from the USPS. The flat rate box at $8.10 is a great value, and even with the increase to $9.15 as recommended by the Postal Regulatory Commission, is still a better value than the published rates for shipping a five-pound parcel via UPS to a residential destination that bears the delivery area surcharge.


Surcharges are another differentiator for the USPS. While all other major package carriers have implemented surcharges, which can add up to 40% to the cost of the shipment, the USPS has not. With the USPS, you simply select the service desired, choose the extra services you require (such as delivery confirmation or insurance), and the rate is the rate. It is simple and straightforward, without adjustments or unexpected added costs.


Looking ahead to the rate case proposed to take effect in May, there are changes coming to the USPS international package shipping services that bear consideration. The USPS is streamlining its international services with product names and delivery commitments that mirror domestic package services. In addition, there are free supplies available for Priority Mail International.


Like all the other package carriers, the USPS is moving towards more dimensional rating for large packages in their US-based services. Even with the new dimensional rules, look to the USPS for lower costs on all types of dimensional rated items.


The Latest News

The USPS is reporting on-time service levels of 96% for Express Mail and 91% and 93% for Priority Mail at one- and two-day deliveries, respectively. Other categories of packages had a combined on-time delivery rating of 85%. The USPS isnt perfect yet, but for certain types of shipments, this level of service (and price) may be just right for your business. What is really striking is how easy it has become to do business with the USPS. First is the free package pickup program, which the USPS says received nearly three million online requests in 2006. No wonder! Free pickup equals the ultimate convenience what a great success story!


USPS is continuing to invest in new technologies to enhance package visibility and provide comprehensive service management. Recent changes, such as measuring delivery performance for Priority Mail by scanning the Delivery Confirmation barcode, will provide specific customer experience data, moving one step closer to competing with other parcel carriers.


From a technology standpoint, the USPS is gaining ground on the other carriers. Internet postage for packages, available through third-party vendor systems, eBay and USPS Click-N-Ship, makes shipment processing, labeling and carrier communication easy. The Electronic Verification System (e-VS), to be introduced soon, will greatly simplify parcel acceptance and induction into the postal system by providing electronic communication and payment. This should especially benefit high-volume package shippers.


Lets remember what the Postal Service does best: timely universal home delivery at a price that is a real value. With a simple-to-use rate structure, an absence of surcharges and regulations that ensure predictable pricing, the USPS is a carrier worth considering as you look for ways to control the rapidly rising cost of shipping in todays environment. With these changes and more to come, the USPS may have a place in your carrier mix.


Johanna Boller is Vice President, Enterprise Software Product Management for Pitney Bowes Global Mailstream Solutions. Visit www.pb.com for more information.