DYMO Endicia Says USPS May Keep Saturday Package Delivery
By Ina Steiner
Shipping is one of the most important tasks online merchants tackle each day, and small sellers are particularly reliant on the U.S. Postal Service. Now the agency wants to drop mail delivery on Saturdays and move to a 5-day delivery schedule, something that could have a profound impact on sellers' operations.
EcommerceBytes asked Harry Whitehouse, chief development officer and co-founder of DYMO Endicia, a leading provider of postage technology solutions, whether he thought a 5-day delivery schedule would become a reality and how it would affect online sellers.
EcommerceBytes: The USPS wants to move to a 5-day delivery schedule. What are the chances Congress will allow it to do so? And do you think that's a good move on the part of the Postal Service?
Harry Whitehouse: This may happen but not for a few years. It would be best if the USPS dropped only mail delivery and continued package delivery on Saturdays to maintain the best competitive advantage in a segment they've identified as a key growth area.
EcommerceBytes: If the USPS does eliminate Saturday deliveries, what impact would that have on small online sellers, especially those who rely on Priority Mail?
Harry Whitehouse: Again, it's important to keep in mind that the elimination of Saturday mail delivery does not necessarily mean that Saturday package delivery and pick-up would be eliminated. The USPS understands that ecommerce customers expect a super-fast delivery model, and this market segment is critical to driving revenue growth for the USPS, so it's unlikely that the Postal Service would completely eliminate Saturday options for packages.
It's possible that the USPS could still offer Saturday package service with advanced scheduling or for an additional fee, or they could propose a number of other Saturday package scenarios. Regardless, there are no Saturday delivery alternatives with private carriers that don't involve a surcharge.
EcommerceBytes: What could they do to compensate? Do you think sellers would move to a different carrier, such as FedEx or UPS?
Harry Whitehouse: Since private carriers charge an additional fee for Saturday service already, there wouldn't be an overwhelming reason for sellers to change carriers based solely on that factor. Most sellers choose the USPS based on price to begin with, so if the Postal Service is still the most cost effective option, even with a Saturday fee, it would make sense for sellers to continue using USPS.
EcommerceBytes: During the PostalVision 2020 conference, Postmaster General Patrick Donahoe said that the agency is looking at a variety of growth opportunities in its package business, what options do you think are available to the USPS in this area?
Harry Whitehouse: The USPS views shipping as a key growth area in terms of increasing its revenue and has made significant upgrades to its services in the last few years to ensure that it's competitive in this regard.
The Postal Service generally can handle small or light packages, particularly those being delivered to residential addresses, at a lower cost to the shipper. While the USPS has experienced growth in this area, there is a great deal of light parcel traffic that is currently handled by private carriers. So there are still substantial opportunities for growing package market share now that comparable technology, comprehensive tracking and pricing flexibility are available to USPS customers.
EcommerceBytes: If the USPS considered extended package delivery schedules, would the cost go up for shippers, and what would it mean for small merchants?
Harry Whitehouse: There's currently limited information available on the USPS implementing this type of change, so we prefer not to speculate at this point. However, when more information is available, we would be happy to revisit the conversation with you.
As we've been discussing, the expansion of ecommerce and the revenue growth potential associated with that is something the USPS intends to capitalize on, so we anticipate any changes the USPS implements for the small and light parcel segment will be aimed at achieving parity with or beating the offerings of private carriers.
EcommerceBytes: Are you seeing postal agencies in other countries doing anything that you think the U.S. Postal Service should consider implementing?
Harry Whitehouse: The Italian Post office sells insurance and phone service, so it is very profitable. However, resistance from a well-established private sector would likely make it very difficult for the USPS to enter these new business markets at this point.
What's key for the Postal Service, aside from working with Congress to implement a more manageable financial structure and commitments, is to keep identifying ways that technology can make its business run faster and more cost effectively and ways that technology can improve its products and services by offering customers more options, greater ease of use, and more visibility.
EcommerceBytes: Any other thoughts on how online merchants can cope in an unpredictable environment?
Harry Whitehouse: Changes in the cost of goods and services are a constant. The challenge for small business owners is trying to control and manage the impact of these price fluctuations and to ensure they are always operating in the most cost-effective way that makes sense for their business.
Using a sophisticated electronic postage or shipping technology solution that easily integrates with other back-end systems or functions on its own, and one that is quickly updated when your carrier changes rates, is the best way to achieve this cost control. Not all electronic postage and shipping solutions are equal, but the best ones give sellers the visibility they need to choose the right shipping option for each scenario - whether cost or speed is the key decision factor. In fact, many online merchants choose to ship with multiple carriers to maintain the tightest cost control.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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