USPS solicits retailers to reserve last-mile delivery capacity
The U.S. Postal Service on Tuesday launched a website where retailers and logistics providers can start bidding on last-mile delivery service to homes and businesses, part of a broader strategy by new Postmaster General David Steiner to boost revenue for the money-losing organization.
The Postal Service had been selling delivery service directly from post offices for many years, but it was mostly limited to very large customers who brought bulk shipments to local or regional stations themselves. Under Steiner’s predecessor, the agency encouraged shippers to deliver parcels to higher distribution centers that could sort them more efficiently. New quote request platformDeveloped with feedback from industry stakeholders, the network is opening up to e-commerce shippers of all sizes willing to pay premium fees for fast, front-door package delivery.
“We know that trends in the shipping market, as well as changing market conditions, supply chain disruptions and the impacts of a post-pandemic world, are pushing our customers to prioritize convenience. We are evolving our business strategies to better reflect the value in our last-mile delivery network to best meet the evolving needs of American commerce and consumers,” Steiner said in a news release.
National Post says it expects to generate billions of dollars in revenue from last-mile deliveries, which will help reduce a $2.8 billion operating loss in the previous fiscal year that ended Sept. 30. The new process allows shippers to reserve capacity at more than 170 local processing units and 18,000 local post offices nationwide.
Customers will be able to propose a combination of volume, pricing and tender times at each available destination delivery unit for same-day or next-day delivery, ensuring the last-mile network is accurately priced for supply and demand based on demand. The prospect of higher prices has fueled speculation that Amazon may reduce its use of USPS as its last-mile delivery partner.
The agency announced on December 17 that it plans to have e-commerce businesses compete for access to the last-mile delivery network. Since then, there has been a significant increase in interest from many companies looking to take advantage of the Postal Service’s universal delivery footprint, the agency said. .
The Postal Service expects to formalize accepted proposals for its Parcel Select product through negotiated service agreements. NSAs are contractual agreements between the Postal Service and individual mailers that provide the mailer with customized pricing in exchange for meeting volume and mail preparation requirements.
