As Reported by Mailing Systems Technology
That 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 three 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.
Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.