UPS Objects to Postal Service 'Competitive Advantages'

By Ina Steiner
EcommerceBytes.com
February 05, 2015





As the U.S. Postal Service increases efforts to take business away from UPS and FedEx, UPS is asking the Postal Regulatory Commission (PRC) to require USPS to be more forthcoming with information about its competitive products.

In a filing on Monday, UPS said there were serious, deeply embedded problems with the manner in which the Postal Service is accounting for the costs of its competitive products business. "These problems prevent the Commission, the public, and indeed likely the Postal Service itself from knowing the true costs associated with this business," the shipping carrier stated in its filing.

The U.S. Postal Service has a mandated monopoly on delivering first class mail. But as it tries to cope the decline in first class mail volume, the Postal Service has looked to parcel delivery as a growing source of revenue - even running ads calling out rivals' new dimensional-weight ground rates.

UPS spokesperson Kara Ross said the company believes the USPS has an advantage over competitors in the parcel business. "Some examples of advantages that the USPS enjoys include: exclusive access to mailboxes; exemption from state and local regulations including parking/traffic tickets, licensing and registrations; exempt from paying taxes such as property, vehicle and fuel taxes; and they do not comply with industry standards for customs and security enforcement," she said.

When asked what information UPS would like to see the USPS make available to the public, Ross referred us to the company's filing with the PRC that outlines the disclosures it would like to see the Commission require. That includes asking the USPS to show how large expenditures, including any significant new capital investments, are attributed to competitive products, as well as disclosing its accounting treatment of significant operational changes relating to competitive products.

UPS also stated in its filing, "The Postal Service should not blindly apply legacy costing models to changed operational circumstances. For example, the new Sunday-only parcel-delivery routes should not reflexively be treated the same for costing purposes as routes involving delivery of both mail and parcels."

Both UPS and FedEx have previously made it known that they believe the USPS has competitive advantages over them.


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 ina@ecommercebytes.com.

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