The United States Postal Service Increases Holiday Competition with Their Own Peak Season Strategy

By Jim Haller | Senior Manager, Transportation | Chainalytics

Shippers have undoubtedly by now heard of the FedEx/UPS Peak Season Surcharge chess match that has been discussed and analyzed at length since both companies announced their holiday rate hikes earlier this year. Not to be overshadowed in their effort to increase competition levels, the United States Postal Service announced their holiday schedule, once again highlighting why they remain a viable option to meet shipping needs this December.

In their announcement, the USPS strategically addresses the numerous cost drivers such as service level, weight, zone, packaging, fees, surcharges, agreements, and non-shipping related costs that shippers must attempt to balance, concepts that become increasingly difficult during the holiday season. Furthermore, they point out the specific rate increases, as FedEx has, of the UPS Peak Season Surcharge and how they are subject to change or increase at any time.

Highlighting competitor increases helps tee up their own strategy consisting of a 7 day delivery schedule during the week of Christmas, including Christmas day in many areas, “three shift” operations per day in key markets, 35,000+ seasonal workers, and Saturday reach to every customer. They also subtly remind shippers that they delivered more packages during the 2016 holiday season than both FedEx and UPS.

However the most notable benefits the Postal Service provides would be the absence of volume limitation or caps as well as the complete absence of a Peak Season Surcharge or surcharge of any kind. Additionally, the USPS promises secure delivery of all packages with inspection service included, driving home the point that they are reliable, convenient, and affordable.

During peak season, all shipments will be based on calendar day delivery day vs. the business day qualification utilized by FedEx and UPS, which includes Saturday and additional upgrade opportunities. They’ve also promised Priority Mail Express entry as late as Dec. 22nd giving shippers an additional day past FedEx and UPS overnight services cut off date of Dec. 21st. In the 2017 holiday calendar, they are offering next day and second day service with Sunday and Holiday Premium options. They claim lower pricing and full functionality of web applications to ensure Operations Integrations Specialist, Networks & Transportation services remain actively engaged to meet deadlines associated with peak season delivery.

While there are cost saving opportunities to be examined with the USPS, this option adds yet another layer of complexity to your holiday shipping strategy this year. As we head rapidly towards Fall, make sure you are taking the necessary steps to leverage costs and carriers this holiday season.

Chainalytics Senior Manager Jim Haller leads the firm’s Parcel Spend Optimization offering, which enables multi-level organizations to reduce costs, improve service levels, negotiate better pricing agreements and generate cost savings of 8-15 percent on their parcel spend.

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