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Front Page » Business & Finance » Post office cancels former competition

Post office cancels former competition

Written by on September 4, 2013
Post office cancels former competition

If you can’t beat them, take advantage of their expansive infrastructure. At least that’s what the US Postal Service is doing with its major competitors.

When express carriers such as FedEx and UPS carved out chunks of its business, the post office embraced the threat, joining forces with powerful competitors to create an opportunity that boosted revenue and led to volume increases for packages shipped via local branches.

With first- and last-mile partnerships with UPS and FedEx, it put itself at the start and end of these carriers’ distribution chains.

The strategy: leverage its 31,000 retail sites across the nation to offer convenience to any shipping customer, even those using competing carriers. And once these carriers have transported the mail cross country, the post office again steps in to make final ground deliveries.

The partnership also gives the postal service access to these carriers’ aircraft, moving millions of pounds of post office mail across the nation and around the world.

“It’s one area for nontraditional revenue growth,” said Enrique Suarez, officer in charge/postmaster for the City of Miami. “It’s a win-win. We pretty much touch every household everywhere six days a week with the network we have. At the same time that we’re taking advantage of [competitors’] expansive air transportation infrastructure, they are taking advantage of our expansive ground transportation network.”

Nationwide, package volume jumped to 3.5 billion pieces last year, up from 3.1 billion in 2010. It’s one of several ways the post office is responding to dramatic changes that led to staff cutbacks and office closures in the last decade.

In the last year it’s launched a direct mail service that has generated at least five campaigns per week at each South Florida branch.

The Every Door Direct mail service allows customers to pinpoint target audiences by mapping out target areas, selecting delivery routes and choosing mailing dates to get their marketing material to local homes and businesses without creating lists of specific names and addresses. A pizzeria, for instance, could send flyers to every address within a two-mile radius.

“It’s been very successful in South Florida,” where each local branch is averaging up to 10 such mailings per week, Mr. Suarez said.

Representatives say the organization is working on developing other campaigns that create value for local businesses. On Sept. 20, its Miami-Dade Postal Customer Council, created to link with corporate clients, will host a meeting to discuss strategies for growing area businesses.

“We’re doing a lot of innovations that are new to the business,” Mr. Suarez said. “It’s all about growing the mail.”

One major initiative has seen the post office rebrand its Priority Mail service, reconfiguring it to specify whether delivery will take one, two or three days, as opposed to a offering a broad one- to three-day delivery window. The overhauled service also offers free boxes and envelopes, package pickup, insurance coverage and tracking at no additional charge.

“We tried to simplify our services and keep them more in line with what the package world is looking for,” Mr. Suarez said. “We’re basically streamlining it and making it easier for customers to understand and get the services they need.”

The result has been a 14% annual spike in package deliveries in Miami as customers increasingly choose the post office to ship online purchases and other parcels.

Another measure allows clients to incorporate quick response codes into mail pieces. Recipients scan these bar codes with their smart phones and access additional product information and promotions.

“There are many ways we are using the mail to add value,” Mr. Suarez said.

But the changes come as the postal service continues to face declining demand for many of its mailing services, thanks to email and other electronic delivery systems.

Nationwide, mail volume plummeted to 160 billion pieces last year, compared to 202.1 billion pieces in 2003.

And this year the organization lost $740 million in its third quarter, ended June 30. It also lost about 4,000 employees during that period for a total of about 46,000 in the last year and 294,000 – about one third of its total staff – since Sept. 30, 2000.

In Miami, about 2,000 employees serve 740,000 addresses on about 12,000 delivery routes. That number will increase based on demand over the holiday season, as the local postal service recruits temporary letter carriers to match the increased workload.

  Details on the Miami-Dade Postal Customer Council: