This summer, the United States Postal Service (USPS) plans to launch a new service enabling retailers to drop off packages for same-day or next-day delivery.
The new service, called USPS Connect: Local, will allow retailers to drop the packages at a local postal facility during business hours for next-day delivery. Alternatively, merchants can fill orders overnight and drop off packages in the early morning for same-day delivery.
Jakki Strako, chief commerce and business solutions officer at USPS, discussed Connect: Local during the 2021 National Postal Forum, which this year was a virtual event on May 3. According to prepared remarks, she said USPS developed the new service as part of Delivering for America, a 10-year strategic plan the carrier unveiled in March.
Aimed at USPS small business customers
While USPS will make the service available to shippers of all sizes, it should significantly impact small businesses that otherwise would not have easy, affordable access to same-day and next-day delivery, Strako said.
“If you’re a micro or small business that makes regular deliveries within relatively small geography, this will give you a tremendously convenient and affordable shipping option to reach your customers with same-day and next-day service. This will definitely give you a competitive edge,” Strako said.
As companies grow and attract customers outside their local communities, they will be able to tap into a service called USPS Connect: Regional, which has a more extensive “shipping reach” than the local service, she said. To illustrate how that could work, Strako cited how a hypothetical “coffee and mug mogul” might move from the local service to the regional one.
A retailer like that might start by generating a lot of local foot traffic and then begin taking orders online and making local deliveries using USPS Connect: Local. Later, as the merchant’s business takes off with customers farther away, it could tap into the regional service, allowing it to access USPS regional or national distribution centers.
Strako did not provide pricing details. A postal service spokeswoman says she currently has no additional details to share.
Pete Zimmerman, sales manager at VAI, a developer of enterprise resource planning software, thinks USPS is on the right track. “The USPS is smart to invest in stronger network infrastructure initiatives including same-day and next-day delivery for small businesses,” he says. Also, he expects the Delivering for America Plan to significantly improve the supply chain.
Under the Delivering for America plan, USPS says it will spend $40 billion in workforce training and development, new vehicles, improved post offices, technology improvements and infrastructure upgrades. Also included are “revenue-generating offerings in the rapidly expanding ecommerce marketplace and pricing changes as authorized by the Postal Regulatory Commission,” according to a USPS statement.
In addition to adding the USPS Connect services, the carrier also will look to boost revenue by expanding its core package products, namely Priority Mail, Priority Mail Express, First-Class Package Service and Parcel Select to offer same day, next day and two-to-three-day delivery options six to seven days a week, according to statements.
USPS plans to make changes for the 2021 holiday season
The new USPS Connect services are part of several changes at USPS since the carrier announced the 10-year Delivering for America strategic plan. In April, USPS announced it would make a series of infrastructure investments ahead of the 2021 holiday season.
The changes include the following:
- It plans to purchase 138 package processing sorters to be operational ahead of the 2021 peak holiday season. USPS also plans to buy additional processing machines over the next 18 months as package volume grows.
- It will lease an additional 45 annex facilities near processing centers in key locations to support surges and overflow packages.
- USPS plans to alter mail processing operations at 18 facilities, completing a consolidation USPS paused in 2015. “Due to the decline in mail volume, USPS will relocate or remove the unnecessary letter and flat sorting equipment as appropriate to make space for much-needed package processing,” a statement says. USPS says it plans to complete the process by November.
USPS seeks to adapt to a changing world
USPS is changing because the delivery market is changing. According to USPS, U.S. mail volume has declined by more than 39 billion pieces, or 23%, in the past 10 years and is continuing to decline. First-Class Mail has dropped 27% and single-piece First-Class Mail—letters bearing postage stamps—has declined 41% during the same timeframe.
During the pandemic, that evolution accelerated. Since the pandemic started disrupting American life in March 2020, ecommerce package volume consistently exceeded volume in 2019, according to data from last-mile technology vendor Convey.
As ecommerce continues to reshape demand for carriers, USPS’ restructuring will be good for its customers and the whole U.S. supply chain, VAI’s Zimmerman says
“USPS’ 10-year plan can help stabilize disruptions created amid the pandemic, meet consumer demand for quick and efficient delivery, and jumpstart e-commerce sales. Through utilizing tech-enabled solutions to track inventory levels and streamline shipping processes to avoid delays and meet demand, USPS’ plan will better help its consumers and delivery processes,” he says.
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