FY2014 Comprehensive Statement on Postal Operations.

I. Successfully Competing for the Package Business

Americans, like the rest of the world, are embracing eCommerce and demanding new options for the fulfillment of their delivery needs. Shipping companies, poised to deliver upon these expectations, will experience growth in volume and revenue as the evolution of the eCommerce retail market continues. eMarketer analysts forecast that eCommerce will continue to increase in the double digits year-over-year to bring its share of overall U.S. retail sales to 9 percent, or $490 billion, by the end of 2018¹. The rise of eCommerce, coupled with the decline of brick and mortar stores, will further benefit the shipping industry.

eCommerce sellers, also known as eTailers, evaluate shipping carriers by three criteria: end-to-end visibility; fast, reliable delivery; and cost. An independent study of shipping trends conducted by stamps.com “Who’s Winning the Shipping War?” indicates that the U.S. Postal Service has dramatically improved its position in the marketplace in regards to all three of the eTailers criteria. This achievement has been accomplished by introducing specially designed flat rate Priority Mail boxes in a variety of sizes, free insurance and tracking, enhanced scanning at more checkpoints, day-certain delivery, Saturday delivery without any surcharge, real-time scanning and Sunday delivery in over 20 major metropolitan markets.

To meet the expectations of a hyper-competitive shipping market, the Postal Service is committed to delivering new value for our customers and becoming a carrier of choice for all eTailers. The USPS has renewed its focus to win the business of major players in this segment and is improving its operational and technical capability to stay atop the requirements of online sellers.

According to the stamps.com study, the Postal Service achieved:

• An average 3.36 package scans per day compared to 3.21 and 2.47 for major competitors.
• An average Total Days to deliver for packages shipped on Monday of 1.79 days compared to 2.21 and 2.75 for the major competitors.
• An Average Total Days to deliver for packages shipped on Thursday of 2.08 days compared to 3.25 and 3.83 for the major competitors.
• An average shipping cost across all delivery zones of $7.34 whereas competitors were at $10.40 and $10.45, respectively.

The Postal Service is at the center of a rapidly evolving industry and is capitalizing on its strengths to grow its package delivery business. USPS shifted its focus this year from a cost-cutting position to a position focused on generating new revenue and exciting its customers. Innovative and creative initiatives are being implemented to adapt to the changing market, to drive value for our customers and build our capabilities for the future. The Postal Service is “Delivering a New Day” by adjusting some shipping prices to attract more business customers and streamlining its mail processing operations so it can invest in new package sorting equipment and other upgrades.

Average Package Scans per Day

(Total Package Scans/Total Delivery Days)

 

Carrier	Zone 1	Zone 2	Zone 3	Zone 4	Zone 5	Zone 6	Zone 7	Zone 8	Average
UPS Ground	3.17	4.50	3.40	2.47	1.39	1.82	1.67	1.33	2.47
FedEx Home Delivery	4.50	4.75	4.31	3.25	2.82	2.23	2.15	1.78	3.21
USPS Priority Mail	4.67	3.94	3.11	3.22	3.44	3.11	2.89	2.46	3.36
Source: Stamps.com Who’s Winning the Shipping War? Evaluating the USPS®, FedEx® and UPS® on Tracking Events, Delivery Times and Overall Costs February 2014 p. 8.

Average Total Days to Delivery by Shipping Zone

Normal Delivery (Shipped on Monday)

 

Carrier	Zone 1	Zone 2	Zone 3	Zone 4	Zone 5	Zone 6	Zone 7	Zone 8	Average
UPS Ground	1.00	1.00	1.33	2.00	3.00	3.67	4.00	6.00	2.75
FedEx Home Delivery	1.00	1.00	1.33	2.00	2.33	3.00	3.00	4.00	2.21
USPS Priority Mail	1.00	1.33	2.00	2.00	2.00	2.00	2.00	2.00	1.79
Source: Stamps.com Who’s Winning the Shipping War? Evaluating the USPS®, FedEx® and UPS® on Tracking Events, Delivery Times and Overall Costs February 2014 p. 11.

Average Total Days to Delivery by Shipping Zone

Including Weekend Delivery (Shipped on Thursday)

 

Carrier	Zone 1	Zone 2	Zone 3	Zone 4	Zone 5	Zone 6	Zone 7	Zone 8	Average
UPS Ground	1.00	1.00	2.00	4.00	5.00	5.33	6.00	6.33	3.83
FedEx Home Delivery	1.00	1.00	1.00	2.67	3.00	5.00	6.33	6.00	3.25
USPS Priority Mail	1.00	1.67	2.00	2.00	2.00	2.00	2.00	4.00	2.08
Source: Stamps.com Who’s Winning the Shipping War? Evaluating the USPS®, FedEx® and UPS® on Tracking Events, Delivery Times and Overall Costs February 2014 p. 13.

Shipping Costs by Zone

Two-Pound Package to Residence

 

Carrier	Zone 1	Zone 2	Zone 3	Zone 4	Zone 5	Zone 6	Zone 7	Zone 8	Avg Total
UPS Ground	$9.78	$9.78	$9.78	$10.27	$10.42	$10.81	$10.91	$11.19	$10.45
FedEx Home Delivery	$9.73	$9.73	$9.73	$10.22	$10.38	$10.76	$10.86	$11.14	$10.40
USPS Priority Mail	$5.32	$5.32	$5.44	$5.84	$7.55	$8.26	$8.98	$9.97	$7.34
Source: Stamps.com Who’s Winning the Shipping War? Evaluating the USPS®, FedEx® and UPS® on Tracking Events, Delivery Times and Overall Costs February 2014 p. 17.

---