Report: UPS moving more packages through U.S. Postal Service

As reported by bizjournals.com:

UPS and FedEx are moving more of their own packages through the U.S. Postal Service, but the flood of packages has begun to tax the system and is raising questions about whether the USPS is charging enough to provide the service, reports The Wall Street Journal.

WSJ says the volume of so-called Parcel Select packages – a USPS service aimed at businesses including Atlanta-based UPS (NYSE: UPS), FedEx (NYSE: FDX), and Amazon (Nasdaq: AMZN) – has grown nearly 500 percent from 2009. The post office has focused on package growth to make up for the loss of first-class mail to the Internet, the paper adds.

A UPS executive on the company’s earnings conference call in July questioned whether the Postal Service is unfairly cross-subsidizing certain products to offer lower prices, the paper said.

The post office delivers an average of 2.2 million packages each day for FedEx, which is about 30 percent of the company’s total U.S. ground segment, the WSJ reported.

UPS would not say how many shipments go through the post office, “but a regulatory filing indicates those type of lightweight shipments accounted for 40%—or about 37 million packages—of its total increase in ground shipments in 2012,” the WSJ said.