• Co-opetition (a form of collaboration among competitors) between the U.S. Postal Service and its rivals improves the efficiencies of the postal sector.

  • If efficiencies are great enough, co-opetition can lead to lower shipping prices.

E-commerce and changing consumer demand have led to an explosion in parcel shipping, which in turn is driving dynamic change in the parcel market. Not only has increased demand for parcels benefitted the providers of parcel services through increased volume, it has also changed the relationship between players in the market. In order to remain competitive, firms are beginning to collaborate with their once rivals — providing processing, transportation, or delivery for each other — something we refer to as co-opetition. For example, both UPS and FedEx use the Postal Service to provide last-mile delivery for a significant portion of their ground parcels.

The OIG invited Dr. John C. Panzar, professor of economics, University of Auckland, to examine the economic efficiency of co-opetition in the parcel market and the relationship among the crowded field of players. Co-opetition in Parcel Delivery: An Exploratory Analysis details Professor Panzar’s research and findings, which show that co-opetition is not inherently anti-competitive or bad for consumers. On the contrary, the paper demonstrates what Professor Panzar calls a “win-win-win” phenomenon: the Postal Service benefits by earning additional revenues through last-mile delivery, private package carriers benefit from a lower delivery cost, and all of it happens without the customer paying a higher price. In fact, it is possible that co-opetition can lead to an overall price decrease for the customer.

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Comments (10)

  • anon

    I have a package waiting to be delivered in the Brooklyn package center on East 19th street and Ave W. It arrived there on Dec 2, 2015 via UPS. It is now 10 days later and the package has yet to be scanned for delivery. It would appear this spirit of cooperation amongst.carriers is not being executed in a fair manner.

    Dec 11, 2015
  • anon

    Hello James, Thank you for your message. Unfortunately, we are a federal law enforcement agency and individual mail delays are not under the jurisdiction of fraud, theft, and misconduct. Please contact the your local U.S. Postal Service Consumer Affairs office at (718) 348-3900) so they can look into the matter.

    Dec 21, 2015
  • anon

    I have sent a package priority mail 2 day guaranteed delivery from Heritage Station in San Antonio TX to Doral FL. on Dec. 1. It was delivered to Ft. Worth TX (4 hours away) on Dec. 4th and there it sits...I suppose, since no one with the postal service 3 or 4 people by phone and someone supposedly a manager by e-mail 3 times. They all tell me my package is in Ft. Worth! I know that! It was supposed to be in Doral, FL. on Dec. 4th. Seems no one can contact wherever it is in Ft. Worth to get this package for which I paid extra for guaranteed 2 day deliver priority mail, to it's proper destination. Is NO ONE THERE? Is NO ONE LISTENING? I don't care if it is Christmas, this is a simple problem that takes a simple resolution. SOMEONE FIX IT!!!

    Dec 10, 2015
  • anon

    Hello Elizabeth, Thank you for your message. Unfortunately, we are a federal law enforcement agency and individual mail delays are not under the jurisdiction of fraud, theft, and misconduct. Please contact your local Postal Service Consumer Affairs office (www.usps.com/help/welcome.htm or (817) 317-3623) so they can look into the matter.

    Dec 21, 2015
  • anon

    I have just tried to create an online account to pay for my box rental in Arvada, Colorado 80006. The system does not recognize my name? I have had this box number for several years and this e-mail address for several yeqrs. Can you assist me?

    Dec 04, 2015
  • anon

    Hello Karen, 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 contact the U.S. Postal Service Customer Service office either by visiting www.usps.com or by calling 1-800-222-1811.

    Dec 21, 2015
  • anon

    I am here ay the post office in Brooklyn waiting for a package that I thought wad being delivered by UPS. It was transfered without my knowledge. The wait time for this package for is on average 1 hour. This has happened to me a least 10 times since this co-opetition process started. If this procedure is to be successful, the decision makers must insure that the consumer is appropriately informed that their will be a different parcel carrier that will be delivering or, the consurmer will be picking up from. I must say that more needs to be done with delivery method. Since this has started I have been told by USPS notification services that my an attempt was made to deliver my package but the truth is the truck never showed up BOLD FACE LIE. Sometimes I dont even get a deliver notice reminder reciept. If there is an insrease in package delivery in this country, the logistics professionals need project that this problems will occur and fix it before it happens.

    Dec 04, 2015
  • anon

    I live in Brooklyn, 11235 and USPS parcel service in my area is terrible. ( US Post office E 18th street, Brooklyn, NY, 11235) . The driver never leave a notice and never come in the building to bring my packages. Usually it works like that: there days we are staying home and trying to catch our parcels, but never received them. Online says three days poor driver was trying to reach us and left three(!!!!) notice, but no authorized recipient available!!! It happened fifth(!!!) time. Tracking # EA336183578RU and EA336183516RU. Personal of this Post office have no respect to people and even not trying to explain why we can't to receive our packages. They tell us the package is in the truck, but driver said it is not! So we live in United States BUT WE CAN NOT TO TRUST United States Post Service!!! Please, go to google map and find customer reviews and rating of this Post office, you will be in the shock... No one positive review and rating is one star. Please, help us to resolve this problem! What to do????? How to save our money, time theft by this Post Office?????

    Nov 20, 2015
  • anon

    Hello Alexey, 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 call your local Postal Service Consumer Affairs office at (718) 348-3900 and they will be able to assist you.

    Dec 21, 2015
  • anon

    I have purchased many items online in the past, and 98% come though USPS. Some years ago, I was furious to learn that an item which I really wanted was left near my opened gate, and this I never received. I was granted a refund from the seller. This week, another package was placed outside of my gate, in the dark. Knowing that so many packages are stolen daily, how can I have the option from this day to pick up any item addressed to me, instead of being delivered by USPS; leaving same on the ground for thieves to snatch? Also, I have a tracking number ( 9400116901144162779071 ) which was picked up since Nov. 02, and that's as far as the notice states. Where's this package? It seems that I may have to stop ordering online, because I do not want to loose another package because the mail delivery person left it on the ground in full view for thieves.

    Nov 14, 2015