This question is a no brainer. Yes — the USPS is still a great option. As shippers navigate the rate increase and how it affects them, it’s important to allow the smoke to settle by remembering 3 things about USPS.
1. Great Value Proposition
Although the recent USPS rate change was a higher percentage increase than those announced by FedEx and UPS, it was nevertheless the first time in 3 years that USPS raised their rates. Although this was intended as a “catch-up” by USPS, it by no means priced them out of competition.
In fact, for certain shipping characteristics, you still can’t beat the value provided by USPS when you consider transit times versus costs. Often times, shippers can send light-weight, small parcel shipments in 2-3 days at a much lower cost than FedEx or UPS. For many companies, this combination of speedy transit and low cost is a great recipe for happy customers and high retention rates.
2. USPS Tracking Vastly Improved
Many do not realize how much USPS tracking has improved in the last year or two. When most people think about it, they remember the days when USPS only scanned items on delivery. Even then, the delivery scan would not update until the day after actual delivery. USPS tracking is now very similar to FedEx and UPS with multiple scans as the package moves through their system and upon delivery.
USPS surcharges are insignificant compared to FedEx and UPS, who tack on extra charges for fuel, delivering to residential areas and to zip codes they consider “off-the-beaten path.” Since USPS visits virtually every residence and business (whether or not a package needs to be dropped off) their costs are not affected when they deliver a package along with your credit card statements and “Vote for [insert Presidential preference]” mailers.
Dimensional weight (DIM) is another method that private carriers use to increase revenue from a package. As we discussed in this tongue-in-cheek article about shipping inflated beach balls, DIM weight can have a big impact on companies that ship oddly-shaped items with larger dimensions. Luckily, the USPS rules for assessing DIM weight are much more favorable to shippers than those used by FedEx and UPS. The only time USPS assesses DIM weight is if a package (more than one cubic foot) is shipped in zones 5-8. However, even in those cases, the factor used by USPS results in a much lower rate than it would with FedEx or UPS.
BONUS: Value-Added Partnerships (VAPs)
Even when you negotiate aggressive discounts with FedEx and UPS, it’s important to note that qualifying for VAP programs will provide the same or better value to companies that decide to ship with USPS. Before jumping into a new agreement with FedEx and/or UPS, assess your characteristics and test your qualifications for a USPS value-added partnership program. You can quickly determine your eligibility by visiting this link.
Shaun Rothwell is Founder and CEO of iDrive Logistics, a supply chain management company that helps small parcel shippers optimize transportation practices and reduce shipping costs. Shaun is a frequent guest speaker at supply chain forums and was recently profiled in Forbes Magazine.