As online shopping has become the norm for many Americans, it has brought operational changes to both brick-and-mortar retailers and online retailers. Shipping costs are now a major consideration for companies. Retailers are working to control their shipping costs as their ebusiness grows, with the traditional retailers relying on their extensive network of stores to reduce shipping costs. Instead of shipping goods from centralized warehouses to far-flung customers, major retailers, such as Wal-Mart, Best Buy, and Gap Inc., deliver from stores close to their customers whenever possible. is focused on building more local warehouses and is also investing in its own delivery fleet. Other retailers have made merchandise available to eBay to sell in select cities with its same-day delivery service, eBay Now. Shipping merchandise from locations close to where customers reside allows retailers to save on shipping costs, which are set based on the distances shipments travel.

Customers are expecting ever higher levels of service. Same-day delivery to a growing number of customers helps retailers provide customers something close to the immediate gratification of an in-store purchase. So far, however, this service has been limited to customers in cities where a decentralized network can serve them.

While lower shipping costs is good for the retailer and its customers, the shipping giants are likely to feel the pinch. One retailer’s reduction in shipping costs is a courier company’s reduction in revenue. Ultimately though, these e-commerce shipping strategies should improve the online shopping experience and accelerate its growth, which will boost the number of packages sent. That’s a boon for all package delivery companies, including the Postal Service.

With its reliable delivery network that serves every address in the United States, the Postal Service should be well-positioned for this shift toward fast, local delivery of online purchases. However, some challenges in its network processing capabilities and delivery operations could hinder its ability to capture a larger segment of the package delivery market. What ways could the Postal Service capitalize on these trends? What improvements does it need to make to position itself as the leader in shipping services?

Comments (7)

  • anon

    I do not understand why everyone is complaining about the USPS service. At least "They", even though minimal at best, Get "some" service! USPS has, for unexplained reasons, designated my, (legal/deliverable) address as, NON-DELIVERABLE! Apparently because I live on the Wrong Side of the Street? That's Just Plain; Lazy/Inexcusable/Unacceptable/Embarrassing! etc... Nine Years, I've been putting up with This, lack of Service! USPS Refuses to assist me with this issue, or Resolve It, or Give Me an Acceptable/Understandable/Legal,,, "Service"! Plain and Simple! Daniel Halley

    Feb 18, 2014
  • anon

    I am terribly disappointed in the USPS. I ordered two items from Amazon marketplace on 11/30 that use USPS and there is still NO information available!!! All other shippers know exactly where my items are. Also, I ordered stamps for my Christmas cards on 12/2 and here it is a whole week later and they still can't tell me when I'll receive those stamps!!! I had to go to the post office and buy more. I'm done using the post office for anything. I will NOT order from any online supplier using the the USPS for delivery. Lastly, there's no where to call on the USPS - they just don't care.

    Dec 09, 2013
  • anon

    Good article and an interesting read. Online shopping is now dominating retail stores and any store that doesn't offer online shopping is doomed to fade away.

    Oct 04, 2013
  • anon

    I love online shopping because it is extremely convenient and it allows you to buy things from brands with no actual store around you. But unless I can go to a store and easily change what I got online, I only buy cheap things or things I know I won't be returning.

    Sep 23, 2013
  • anon

    I am not as concerned with the pricing of the express mail as with the delivery and tracking process. I just sent a package express mail to Killeen , Tx with guaranteed delivery by 3:00 pm last Sat. It was not delivered by then and my son texted my wife to let her know that it had not been delivered to him as promised. He then got a call from his customer in Dallas who said if you don't have it, forget the deal. My son got in his car and drove around for about 20 minutes until he found the postman and asked him if he had the package. He then got it from the postman, went back home and texted my wife again letting her know that he had to go get the package from the postman, but that he did now have it! I guess the postman was just going to deliver it as "regular" mail (disregarding the $ 19.95 cost). I then went on line and tracked it through the postal site and it said that it was delivered at 11:03 on Sat morning. Totally false!! The local PO told me that I had to deal with the Killeen,Tx PO and gave me the phone number 254-634-0281. I called at 08:10 this morning and the phone was busy. I just called again at 08:25 and it rang and rang and eventually hung up on me. I just tried to call again at 8:28 and it rang 10 or 11 times and again hung up on me. Well - its 08:36 and I just tried to call the Killeen PO again. It rang 10-11 times and again hung up on me!! FORGET THE GUARANTEE that it will arrive at a certain time. And forget the idea that you can call the Killeen PO and deal with them. If you're smart you will send important packages by UPS or FEDEX!

    Sep 17, 2013
  • anon

    Once the USPS decides it wants to actually deliver packages, letters, and everything else it's supposed to, I'd gladly stop pestering Amazon about never using USPS to deliver to my residence in Seattle. However, with e level of abuse, mis-deliveries, non-deliveries, and other nonsense, not only can I not trust the USPS for online ordering, I actively engage with online retailers and will not do business with them if an alternative can not be used at my own expense. You guys need to start looking REALLY hard at why "It's not the problem of the USPS for mis-delivered, non-delivered, mishandled, or otherwise problematic service" as I hear not only from my local "Postmaster" but also from "Customer Service". I'm using quotes, because my "Postmaster" is not a master of his post in any sense of the term, and "Customer Service" only issues false promises, abusive conversations, and doing everything in their power to pass the buck and provide the most disservice possible. Accountability would be a good place to start looking.

    Sep 20, 2013
  • anon

    I am a Postal Worker and I do order online as well as use my mailbox. But I have to say, and please take me seriously, WE are going to lose the deal or arrangement or whatever you have with them because you can never track an order with the USPS. When I order from Amazon it often doesn't ask which form of shipping will be used. Sometimes it's the USPS, but other times it's UPS. I suppose it depends on the dealer that you are dealing with, and who they have chosen to deal with. I recently made an order with Amazon for several things my son wanted and so was dealing with various dealers around the country. EVERY single one of the UPS orders I was immediately able to track and know when to expect arrival. And the packages did arrive on the day stated. With the USPS packages at first I was told "No information available" then it went to "sent from dealer". After that there was a scan done at every facility when the package "arrived" but never when it "left". I work at the Harrisburg, PA central office 17107. For 3 days the package was untraceable; and then my mailman delivered it, and I said, "That's interesting. This package went from Philadelphia straight to New Cumberland and never passed through the Harrisburg Hub. I didn't know our small town had a direct truck from Philly?" Of coursed we laughed about it, but if you want HONEST FEED BACK: People really don't know how the Post Office works. Plain and simple. It took 13 days for my son's USPS package from LA to PA, and yet UPS did it in 3 to 5. PLEASE!!!!!!! You figure it out- Jeff Anderson.

    Sep 16, 2013

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