• on Dec 9th, 2013 in Ideas Worth Exploring | 4 comments

    Today’s consumers are a demanding bunch – expecting to get what they want precisely when and where they want it.

    These changing expectations are putting the pressure on both brick and mortar retailers as well as online retailers. Pressure grows to deliver goods faster, cheaper, and with more flexibility. Now, customers expect free shipping and overnight delivery or, in some cities, same-day delivery.

    It seems same-day delivery might not be fast enough for some. Amazon.com is toying with the idea of delivering packages within 30 minutes – via drone.

    In an interview on a recent CBS “60 Minutes” news program, Amazon.com CEO Jeff Bezos discussed his Prime Air unmanned aircrafts, which he claims carry packages up to 5 pounds – the weight of most parcels Amazon.com delivers – and have a range of about 10 miles. This could make them viable in more densely populated areas. Bezos thinks he could get this service up and running in about 5 years.

    So is all this drone delivery talk just pie in the sky or a potential delivery path worth considering?

    The technology is getting there. It’s already being tested in other parts of the world. In Australia, a textbook rental company, Zookal, plans to use drones to deliver textbooks to students as early as March 2014. Meanwhile, Silicon Valley startup Matternet is testing drone delivery in Haiti and the Dominican Republic and sees the potential for using these small, electric crafts to deliver goods in populated areas where they can make multiple deliveries within their limited range of a few miles.

    But it’s likely to be some time before U.S. skies look like something out of “Star Wars,” with thousands of small, autonomous aircrafts zipping around and dropping packages at our doorsteps. The Federal Aviation Administration (FAA) isn’t moving too quickly to open the skies for commercial drone purposes, and understandably so. The thought of unmanned vehicles flying in areas with lots of air traffic raises significant safety concerns.

    Still, innovation is all about experimenting. Many people in the late 19th century thought the light bulb would never catch on. What are your thoughts on these delivery drones? Is driver-free, aerial delivery the answer to the growing demands of consumers? Is this a feasible option for the Postal Service in the coming years? Or could it be more like the Postal Service’s ill-fated test of “rocket mail” from the late 1950s where a cruise missile loaded with mail launched from a submarine? That experiment didn’t gain traction. 

  • on Nov 25th, 2013 in Pricing & Rates | 1 comment

    Imitation is the sincerest form of flattery, they say. Maybe so. It’s just not usually FedEx that is doing the imitating or the flattering. But with its new “simple and predictable” flat rate shipping option, FedEx seems to be trying to look like the U.S. Postal Service in one particular way.

    The FedEx One Rate bears more than passing resemblance to the popular Priority Mail Flat Rate, suggesting FedEx is shifting strategy to become more aggressive in the light-weight retail package segment it once largely ceded to the Postal Service.

    And yet, the products aren’t identical. For one thing, FedEx One Rate isn’t quite as simple as Priority Mail Flat Rate. Unlike Priority Mail Flat Rate, One Rate has weight limits: 10 lbs. for an envelope and 50 lbs. for a parcel. It also charges based on distance across three zones of travel. Your package is going through more than one zone? You’re paying more.

    Then again, FedEx One Rate comes with free packaging, like Priority Mail, and FedEx is waiving some – but not all – associated surcharges, like residential and fuel surcharges. Customers who find that surcharges add significantly to the shipping cost will likely smile.

    All in all, customers should be well-served by having another retail shipping option this holiday season. The National Retail Federation expects retail sales in November and December will rise 3.9 percent over last year to $602 million - $738 per shopper – and some of those purchases will certainly be gift-wrapped and put in a shipping box.

    While the FedEx product appears less simple, it could have other features that customers might prefer. A customer might find the hours at a nearby FedEx Kinko’s more convenient than the local Post Office. And, FedEx’s enduring image as a reliable shipper might make FedEx One Rate more appealing to some. Still, others might prefer the simplicity and certainty of the Priority Mail Flat Rate, with its one-price-goes-anywhere approach. Too early to tell.

    But maybe you can give us an idea:

    • What are your holiday shipping plans this year?
    • Do you plan to use one of these simplified packaging products?
    • Does convenience outweigh simplicity? Or vice versa?
    • What other retail package services would you like to see? 
  • on Sep 30th, 2013 in Products & Services | 6 comments

    This is the time of year when retailers, nonprofit organizations, and other mailers step up their holiday advertising mailing campaigns. Volume spikes in this period, known as the fall mailing season, which then gives way to the even-busier holiday mailing season, when personal correspondence and packages spike. The U.S. Postal Service makes most of its money for the year in the period between Labor Day and Christmas.

    Commercial mailers work closely with the Postal Service to help it prepare, but the fall mailing season has always presented operational challenges. In some ways, it is highly efficient because facilities are staffed for busy times. But postal equipment, including mail tubs, trays, mail transporting equipment, and pallets, have to be in the right places at the right times. In past years, commercial mailers have complained about shortages of mail equipment. Ideally, mail sorting equipment should run at optimal throughputs for maximum efficiency, and the online system mailers use to set up mail entry appointments should work seamlessly. Still, mail delays can occur for a variety of reasons, including mail processing errors, inefficient use of automation equipment, congestion on the facility floor, and working from incomplete operating plans.

    The Postal Service’s fall mailing season plan attempts to eliminate roadblocks to swift processing and delivery. This year, it has ordered extra mail transport equipment and looked at ways to shift volume from heavily used equipment to under-used processing equipment. The Postal Service is also relying on the increased visibility from the Intelligent Mail barcode as a diagnostic tool to uncover bottlenecks. These tools helped it reduce mail delays in fall 2012 by showing “pinch points” and helping managers act on that information to reduce mail cycle times.

    This year, however, could prove especially challenging as the Postal Service continues with its network consolidation implementation. It has completed more than 150 facility consolidations and has moved more than 700 pieces of equipment in support of the consolidations. With the late date of Thanksgiving this year, the end of fall mailing season pushes right into the peak mailing season for the holidays.

    Mailers, what have your experiences been like so far this fall mailing season? Are there noticeable improvements in mail equipment availability, mail delivery times, and appointment opportunities? Has network consolidation posed any unexpected challenges?

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