Play to Win in the Parcel Market

It seems the pricing of parcels in today’s market is a lot like the story of Goldilocks and the three bears (with the U.S. Postal Service playing the role of Goldilocks): If USPS sets prices too high, it opens the door for the big retailers to come in and make their own deliveries. If it prices them too low, it loses money. It needs to price parcel delivery services just right.

 

Social Media and Expectations

How many times have you checked your Facebook page today? Twitter? Or maybe you’re an Instagram person. Social media is a big part of many people’s lives, and it’s also becoming a common way for customers to contact the U.S. Postal Service.

Customers might use Facebook, Twitter, or Instagram to comment on a particular retail experience, seek information on a product or service, or ask USPS to respond to complaints and questions. Collectively, the Postal Service’s social media accounts received more than 390,000 posts in fiscal year (FY) 2016.

 

Rethinking Assumptions

With $72 billion in revenue and 154 billion pieces of mail moved in a year, the U.S. Postal Service deals in the billions. That’s why you sometimes hear people joke that “a few million here and a few million there and pretty soon you are talking about real money” with the USPS.

 

Riding Out Fuel Fluctuations

How prepared is the U.S. Postal Service for a sudden increase in the price of diesel fuel? When diesel climbed by $2.03 a gallon from March 2009 to March 2012, the USPS’s fuel tab soared by $341 million.

It’s what happens when you operate one of the biggest vehicle fleets in the country: 7,600 of its own in addition to almost 16,000 contract vehicles. In fiscal year 2016 alone, USPS bought about 251 million gallons of diesel at a cost of over $570 million.

 

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