Cooperative Competitors

Nov 02 2015
OIG Blog Category: Delivery & Collection 10 Comments

You may or may not have noticed the U.S. Postal Service delivers a lot of packages that have a UPS or FedEx label on them. And maybe you’ve wondered what’s up with that? Why would the Postal Service deliver its rivals’ packages?

No, the Postal Service isn’t just lending a helping hand to its commercial competitors. Rather, UPS and FedEx take advantage of the Postal Service’s Parcel Select product offerings, available to any bulk shipper that meets preparation and entry requirements. Simply put, the two commercial companies transport parcels that the Postal Service then takes and delivers.

Why? Because sometimes parcels go to remote areas, where it would be unprofitable for companies to establish regular delivery service. The Postal Service, on the other hand, is required by law go to every address in the country. So, as they do normally, the companies handle the long haul – say, from a client in New York to El Paso – but then pay the Postal Service to deliver the package to a final destination beyond city limits. And sometimes, the Postal Service is the least costly option, which is why you see the Postal Service delivering FedEx and UPS packages in urban areas, too.

Competitors collaborating is a relatively new business phenomenon that we call co-opetition, and the benefits it offers to all parties involved are evident. UPS and FedEx, for example, save money by avoiding unprofitable routes, and the Postal Service realizes additional revenues as a result.

But according to a new white paper we are releasing today, there’s another beneficiary of co-opetition: You. The Postal Service’s joint work with private parcel carriers effectively creates a more efficient transportation and delivery chain, thus helping to keep costs down. In fact, our study shows that if efficiency gains are high enough, co-opetition can even lead to lower prices.

The paper’s findings are the work of Dr. John C. Panzar, a professor at the University of Auckland and an expert on postal economics. His analysis shows that co-opetition isn’t anti-competitive or bad for consumers at all. Quite the opposite. Check out all the details in Co-opetition in Parcel Delivery: An Exploratory Analysis .

Does it matter to you which carrier delivers the package to your door?

What do you think of the Postal Service delivering other companies packages?

Comments (10)

  • anon

    Although I strongly agree with the shipping co-op to keep costs down. The USPS needs to uphold their end of the agreement. I pay Fedex or UPS to deliver a package to my door, but when it comes via the Post Office my mail carrier will not get out of the truck. She just puts a slip in the box for me to go pick it up. I am not getting the services I pay for. This is costing me more money not to mention time.

    Feb 26, 2016
  • anon

    I put mail out in my mailbox this morning, put the flag up and then left for work. When I came home, the flag was still up and my mail was still in the mailbox. Sitting on my front porch was a box that had been delivered; the label said UPS but in light of this article, I'm guessing that it was probably actually delivered by my mailman who then forgot to get my mail out of the mailbox. Based on that experience, I can't say I'm real in favor of this if it means my mail is not going to get picked up.

    Nov 11, 2015
  • anon

    Thanks for your message. Unfortunately, this issue falls outside of the jurisdiction of our office. As the Office of Inspector General (OIG), our role is to investigate waste, theft, fraud, and abuse within the Postal Service through our audits and investigations. Please your local Postal Service Consumer Affairs office and they will be able to assist you.

    Dec 04, 2015
  • anon

    The "Postal Service Consumer Affairs" office is totally ineffective. You get pat answers and if you don't settle for them, they are rude to you. The USPS should be ashamed of itself, and the true joke is having the USPS police itself.

    Oct 18, 2016
  • anon

    This week was the first time I got a National Enquirer Magazine in 6 week the last one was Sept 21, 2015. The National Enquirer send me a letter to may sure that they had the right Address It's came in a week and I send one to the Postal Office and I did'tn get the one for Nov 1, 2015 and this mail person put My Daughter School Check in the Dirty and ( I have Picture)I have my Name on the mail box and she put people Name like Pat cleveland that left 4 years ago . I have about 10 to 15 Case # I need help I'am disabley and i don't need the stress help.

    Nov 06, 2015
  • anon

    I have read the comments here, and nothing I read is as insane as what's been happening on our block in Chicago. Yes, I filed complaints. I filed them for over 3 years now. But is seems out mail carrier has seniority and there is much USPS can do to him. We haven't had a week go by that we haven't gotten mail that didn't belong to us, or have our own mail returned to us by neighbors who got it. Sometimes we get our mail and sometimes we don't. The entire 2 block area surrounding my house has been dealing with this situation for years, and USPS supervisors always say the same thing- the carrier has a vision problem. After tonight, when my neighbor up the street brought me my mail for the second time this week. i've decided to keep complaining until something positive happens. I doubt it will happen, but I refuse to give up. USPS should be ashamed of itself.

    Nov 04, 2015
  • anon

    I am not sure my complaint got thru. When I complained about the stupid lettering at the end. Do you really think an animal could file a complaint? If so heaven help us all. Get real folks!

    Nov 04, 2015
  • anon

    Think this is fantastic idea! I've not yet read deals in Co-opetition in Parcel Delivery but intend to do so. Looks, so far, to me as a win, win, win: PostalService, UPS/Fedx and US, the consumer. Thanks. Katherine

    Nov 02, 2015
  • anon

    I do not trust the mailman delivering the mail on his route to deliver other companies mail. He is mishandling mail on his route.

    Nov 01, 2015
  • anon

    Oh, that would be a problem, but if you haven't taken this up with the closest Post Master you really should--had a problem like this a number of years ago, and although it took a bit of doing, things were taken care of. Give it a try. Katherine

    Nov 02, 2015

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