Shipping services products include Express Mail, Priority Mail, Parcel Select, Parcel Return Service, Premium Forwarding Service, Global Express Guaranteed (GXG), Express Mail International, Priority Mail International, and M-bags, as well as negotiated service agreements and several other international services including international ancillary services. Shipping services, which represent 13 percent of revenue but less than 1 percent of volume, face considerable domestic and international market competition. As a group, shipping services revenue was $8.7 billion, with a volume of 1.4 billion pieces. Revenue increased 5.2 percent, while volume increased 2.8 percent.
Prices for shipping services are adjusted annually each January — consistent with industry practice — which encourages comparisons that show the affordable options offered by the Postal Service. Most shipping services product prices changed on January 4, with some related classification changes to meet new customer requirements.
Express Mail, the fastest domestic postal product for time-sensitive items, is a guaranteed overnight or second-day delivery for urgent letters, documents, and merchandise. Any mailable matter weighing up to 70 pounds may be sent as Express Mail, which is closed against postal inspection. The product includes tracking, proof of delivery, Sunday and holiday delivery where available for a fee, insurance up to $100, a flat-rate envelope, and standard boxes as well as custom-designed and co-branded boxes for commercial mailers. All postal-provided Express Mail shipping envelopes, boxes, and packaging are available at no additional cost and meet the high environmental standards of Cradle-to-Cradle certification. When properly prepared, boxes can also be used for Express Mail International service. Service performance and reliability for this product were at an all-time high.
Overall, Express Mail prices averaged a 4.5 percent increase that maintained a valued advantage in the market, especially for lightweight items. Other than the flat-rate envelope that is priced at a uniform price regardless of weight and domestic distance traveled, prices are based on weight and domestic distance (the number of zones through which an item is transported). Unlike most other shipping companies, the Postal Service does not impose surcharges for fuel price increases, residential delivery, forwarding, Saturday delivery, or for off-shore domestic addresses such as Alaska, Hawaii, and Puerto Rico.
Retail prices are available to any customer using permissible postage payment methods. Lower Commercial Base prices are available to customers who use alternate postage payment systems that capture more customer information such as the online Click-N-Ship, Express Mail Corporate Accounts, or approved information-based indicia (IBI) metering systems. Even lower Commercial Plus prices are available to customers who use authorized postage payment methods and mail a minimum number of packages.
Express Mail features continue to evolve and expand for retail and commercial customers. Many customer-requested enhancements and innovations have been introduced, including Hold For Pickup, Click-N-Ship modifications, expedited absentee ballots option for overseas military personnel, open and distribute containers and processes, a letter-size envelope, a waiver of signature at delivery, and use of permit imprints for postage payment under the Electronic Verification System.
Express Mail Hold For Pickup lets a sender have a shipment kept securely at a destinating Post Office to await convenient pickup by the recipient. The service includes an automated callback notification to senders about the arrival status of shipments. Hold For Pickup service is also available through usps.com.
To simplify the deposit of prepaid packages at Post Offices, customers who use Click-N-Ship or PC Postage can print a single Shipment Confirmation Acceptance Notice form for multiple packages mailed at the same time. The employee accepting the packages only has to scan the barcode on the form for all packages rather than scan each package separately.
An expedited option to return absentee ballots using Express Mail was established for personnel at Army Post Office, Fleet Post Office, or Diplomatic Post Office (APO/FPO/DPO) locations. Applied to the top of the ballot return envelope is a unique blue Express Mail Label 11-DOD, which includes the waiver of signature and guaranteed-by-end-of-day endorsements. Postage for this service is paid by the federal government.
A valuable drop-ship service for commercial shippers is Express Mail Open and Distribute, which can be used to expedite mail in bulk, such as First-Class Mail bills or Standard Mail parcels containing medicine. Shippers enclose pieces all destined for the same ZIP Code or range of ZIP Codes in an Express Mail sack or distinctive Postal Service-provided tray box and address it to the destination postal facility. Several features and activities added this year to improve Open and Distribute and redirect services, included half and full tray boxes, documented acceptance and processing procedures, and a Lean Six Sigma project for improving scanning and service performance.
Simplified postage payment with a permit imprint is available with the Electronic Verification System that enables commercial mailers to manifest and track large mailings of Express Mail shipments. Mailers transmit electronic files to the Postal Service to support this system, which generates financial documents such as postage statements, deducts postage from a centralized account, and produces other mailing reports.
Priority Mail is a fast, economical product, with targeted (but not guaranteed) delivery within 1 to 3 days that households and businesses generally use to send letters, documents, and merchandise. Any mailable matter weighing up to 70 pounds may be sent as Priority Mail, which is closed against postal inspection. The product provides security and preferential handling. Priority Mail includes free Delivery Confirmation for mailers submitting electronic manifest files. It also features convenient prepaid envelopes, and flat-rate envelopes and flat-rate boxes as well as custom-designed and co-branded boxes for commercial shippers. All postal-provided Priority Mail shipping envelopes, boxes, and packaging are available at no additional cost and meet high environmental standards as Cradle-to-Cradle certified. When properly prepared, envelopes and boxes can also be used for Priority Mail International service. Priority Mail service performance was at an all-time high.
Overall, Priority Mail prices averaged a 3.3 percent increase that maintained a value advantage in the market, especially for lightweight items. Except for the Priority Mail flat-rate products, prices are determined by weight, domestic distance (the number of zones through which an item is transported), and in some cases, dimension. Priority Mail flat-rate products, which are priced at a uniform price regardless of weight or distance traveled include two Flat Rate Envelopes, Regular and Padded; and three different sizes of Flat Rate Boxes. A special lower price for the Large Flat Rate Box is offered to military addresses. Discounts are available for customers who use electronic postage and meet other requirements. Unlike most other shipping companies, the Postal Service does not impose surcharges for fuel, residential delivery, forwarding, Saturday delivery, or off-shore domestic addresses to destinations such as Alaska, Hawaii, and Puerto Rico.
Retail prices are available to any customer using permissible postage payment methods. Lower Commercial Base prices are available to customers who use alternate postage payment systems that capture more customer information such as the online Click-N-Ship service, approved information-based indicia (IBI) metering system, or specified permit imprint and barcode configurations. Even lower Commercial Plus prices are available to customers who use authorized postage payment methods and whose account volumes exceed 100,000 pieces in the previous calendar year or who have a customer commitment agreement.
Two innovations were added this year to Commercial Plus: a half-pound price and a flat-rate padded envelope. Commercial Plus Cubic prices in five tiers were also added this year for pieces that measure 0.50 cubic foot or less and weigh 20 pounds or less if the qualifying Priority Mail customer presents at least 250,000 such pieces annually or has a customer commitment agreement. Prices for the five tiers are based on size and distance rather than weight and distance. Commercial Plus Cubic is designed to encourage smaller, less wasteful packaging.
Additional promotion of flat-rate shipping included the distribution of Priority Mail Flat Rate Box kits to customers who responded to the advertising campaign through reply cards, the Internet, and telephone. Over 850,000 kits were fulfilled during the 2009 holiday period.
A valuable drop-ship service for commercial shippers is Priority Mail Open and Distribute, which can be used to expedite mail in bulk such as First-Class Mail bills or Standard Mail parcels containing medicine. Shippers enclose pieces all destined for the same ZIP Code or range of ZIP Codes in a Priority Mail sack or distinctive Postal Service-provided tray box and address it to the destination postal facility. Several features and activities added to improve Open and Distribute and redirect services included half and full tray boxes, a self-adhesive label for flat-rate boxes and envelopes, documented acceptance and processing procedures, and a Lean Six Sigma project for improving scanning and service performance.
Simplified postage payment with a permit imprint is available with the Electronic Verification System (eVS) that allows commercial mailers to manifest and track large mailings, including Priority Mail shipments. Mailers transmit electronic files which generate financial documents such as postage statements, deduct postage from a centralized account, and produce other mailing and sampling reports.
Parcel Select is an economical ground package-delivery product that medium and large volume shippers and consolidators use to ship packages. Any mailable matter may be mailed as Parcel Select except matter required to be mailed as First-Class Mail or Priority Mail, and publications required to be entered as Periodicals. Price is determined by weight, distance, entry facility, and in some cases, dimension. The best pricing is available for packages entered at destination facilities: destination delivery unit (DDU), destination sectional center facility (DSCF), or destination network distribution center (DNDC). Parcel Select also includes higher price options for parcels prepared and sorted by NDCs at Origin and NDC Presort, as well as barcoded machinable parcels.
Parcel Select combines parcel consolidator expertise and logistics with the vast delivery network of the Postal Service to provide highly competitive prices and excellent delivery service. The Postal Service has actively developed strategies to increase volume by optimizing pricing and developing new customer contracts based on flexible pricing; increasing partnerships and better leveraging the first- and last-mile pickup and delivery network; and by shortening start-up time for new customers. As a result, ground packages drop-shipped at DDUs and DNDCs represented more than 97.5 percent of Parcel Select volume as businesses continue to move packages closer to destination. Service performance was at an all-time high in 2010.
Overall, Parcel Select prices increased 4.7 percent in January, with a 3.9 percent increase for DDU, a 6.9 percent increase for DSCF, and a 6.9 percent increase for DNDC. There were no increases for Origin Network Distribution Center (ONDC), Presorted NDC, and Barcoded Nonpresorted Parcel Select. Parcel Select mailers who pay postage using approved PC Postage and request the barcoded nonpresorted price, no longer have to meet the 50-piece minimum per mailing. For destination entry and presorted prices, however, the 50-piece minimum volume requirement was not changed. Loyalty and Growth Rebates were eliminated in May.
A major development is the extension of FedEx SmartPost. All existing FedEx Ground customers, including FedEx Home Delivery customers, qualify for SmartPost. Customers can rate shop and select FedEx SmartPost if they use a FedEx shipping system or a corporate account. This arrangement opens up the FedEx Ground business to potentially shift volume to Parcel Select. In addition, ground shipping solutions are now offered to government agencies in the General Services Administration schedule 48, positioning the product lines for further revenue and volume growth.
Post Offices and delivery units now are using Enhanced Visibility Tracking Events (EVTE) for packages with Delivery Confirmation or Signature Confirmation services. With EVTE, track and confirm services are on the same playing field as competitors, enabling customers to track packages at their convenience from time of acceptance, to time of arrival at a delivery unit, to the final delivery point. Increasing product visibility maintains the high service performance for Parcel Select and contributes to its growth.
Parcel Return Service (PRS) is an easy and convenient product that customers use to mail back items that were recalled or need to be returned, repaired, or recycled. Parcels may be mailed as PRS except matter required to be mailed as First-Class Mail or Priority Mail. Price is determined by weight, distance, entry facility, and, in some cases, dimension. PRS features free carrier pickup and two price categories: return delivery unit (RDU) and return network distribution center (RNDC). In January, overall prices increased 3 percent. RDU increased 2.1 percent, and RNDC increased 3.3 percent.
PRS customers use a preprinted label provided by the merchant or agent that does not require them to pay postage to return the parcel. Customers can take the parcel to a Post Office or request free carrier pickup at usps.com/pickup. The merchant or agent retrieves returned parcels from Post Offices (RDUs) or network distribution centers (RNDCs), and postage is deducted from an advance deposit account.
PRS provides full end-to-end product visibility through the logistics partner, who reverse manifests each shipment. This year the Postal Service expanded PRS partnerships begun in 2009 with both FedEx and UPS, in addition to continuing a long-standing relationship with Newgistics. The partnerships give customers other options to use the Postal Service’s unparalleled first-mile capabilities.
Premium Forwarding Service (PFS) reships all mail from a household customer’s primary address to a temporary address weekly via Priority Mail service, for a minimum of two weeks and up to one year. PFS was created to meet customer demand for an alternative to temporary forwarding service. The service remains popular with customers, and volume has been growing steadily.
The Postal Service conducted a market test of a new product, Samples Co-op Box, which contained free samples of health, beauty and snack food products from multiple consumer packaged goods companies. The co-branded box, called Sample Showcase, weighs less than two pounds and includes the description that the contents inside are a selection of free product samples. Initial customer response was very positive. National rollout is expected pending final analysis of results.
