USPS Delivered a Record Share of FedEx Ground Shipments

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Between December 2012 and February 2013, the U.S. Postal Service delivered a record 35.6% of all FedEx Ground shipments.  The Postal Service delivery was provided as part of the FedEx SmartPost product which experienced a 26.4% growth in shipping volume during FedEx’s 3rd fiscal quarter that ran between December, 2012 and February, 2013. The following chart illustrates the growth in Postal Service delivered shipments as a share of FedEx Ground shipments.     The Postal Service share of FedEx Ground deliveries has steadily grown over the past five years.   The Postal Service’s share of FedEx Ground deliveries in the 3rd quarter of FedEx’s 2013 fiscal year represents a 9.6% increase [...] Read more »

FedEx Growth Continues to Rely on USPS

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In its 1st quarter 2013 earnings report FedEx reported that it handled over 108 million FedEx SmartPost parcels delivered by the Postal Service.  FedEx SmartPost volume grew by 17.6% on a year-to-year basis as compared to a 4.7% growth for shipments that FedEx delivers through its FedEx Ground and FedEx Home networks. Currently FedEx SmartPost generates 29.9% of the shipment volume tendered to FedEx Ground.  The USPS share of  FedEx Ground’s deliveries has increased by 2.4% over the past year and 6.3 since 2010. FedEx SmartPost’s double digit growth rate suggests that the market for USPS delivered parcels is extremely strong.   During this quarter, United Parcel Service was in at [...] Read more »

USPS Delivered 30% of FedEx Ground Shipments in FedEx’s Fiscal Fourth Quarter

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For the twelfth consecutive quarter  FedEx has increased the proportion of shipments handled by its FedEx Ground subsidiary over the same quarter the previous year.    The continued rapid growth of FedEx Ground’s SmartPost service reflects the continuing increase in business-to-consumer shipments that FedEx transports for its customers. The following chart illustrates the share of FedEx Ground shipments delivered by the Postal Service since 2009.  The increase in USPS share of deliveries reflects the faster market growth of FexEx SmartPost as compared to FedEx Ground’s delivery using other FedEx Ground or FedEx Home contractors.  The fast growth rate of Fedex SmartPost reflects the need of B-2-C online retailers for a low cost delivery service [...] Read more »

Making Parcel Post a Competitive Product Poses Less Threat to Rural Areas than Public Representative States

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The Postal Service has petitioned the Postal Regulatory Commission to make Parcel Post a competitive product. (Docket No. 1012-13) If approved this would remove nearly all parcel products offered by the Postal Service from price and service regulations. The proceeding has received little interest and only two parties provided comments, David Popkin and the Public Representative. Neither party challenges the Postal Service’s contention that Parcel Post is not a market dominant product. The Public Representative agrees that the Postal Service only has a small share of the market for parcel shipments sold at a retail counter. The only concern that both parties raise is access retail locations of either FedEx [...] Read more »

Postal Service Delivers a Record share of FedEx Ground Shipments

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In its most third quarter, 2012, FedEx, through its FedEx SmartPost Operations delivered 32% of all shipments handled by its FedEx Ground Division.  The FedEx Ground Division includes FedEx Ground, FedEx Home, and FedEx SmartPost. During the quarter FedEx Ground had the Postal Service deliver 123 million parcels, an increase of 12.9% over the number of FedEx shipments that the Postal Service delivered a year ago.  On a daily basis this means that between FedEx dropping nearly 2 million parcels a day into the Postal Service’s delivery network. The Growth of FedEx SmartPost Volume is less than the growth in volume that Postal Service handled from all carriers that use it [...] Read more »

USPS Network Optimization Will Upgrade Priority Mail Service

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In a web-based presentation presented to a winter PostCom meeting, Postmaster General Pat Donahoe stated that the Postal Service is looking at expanding the geographic area that Priority Mail will provide overnight service.  Improvements in the geographic reach of overnight delivery service provided by Priority Mail would provide a clear indication that the Postal Service understands the service needs of its rapidly growing on-line retail customers for a delivery service for light-weight parcels that is service competitive with the services that United Parcel Service and FedEx offer for heavier parcels. While little is known about what the Postal Service is planning, the goals of expanding the Priority Mail Network clearly is focused on having [...] Read more »

United Parcel Service Delivery Failures Raise Questions About its Readiness for e-commerce.

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In December this holiday season, United Parcel Service just wrote the advertising campaigns for both FedEx and the United States Postal Service. Both competitors can go to potential e-commerce shippers with a very simple slogan: “We deliver when you need us most.” United Parcel Service’s problems were bad enough to cause the Denver Post editorial board to comment. While Federal Express and the U.S. Postal Service were able to get their packages delivered before Christmas without significant incident or complaint, the same can’t be said for UPS. On Saturday afternoon, hundreds of people stood in line at the UPS customer service center in Commerce City hoping to retrieve gifts, medication [...] Read more »

FedEx Growth Shows Focus on B-2-C Market

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Paul Page, an editor with the Journal of Commerce, tweeted today “Trying to understand why Bloomberg sys FedEx 2q profit up on stronger consumer shipments when domestic shipments fell 4%.” The decline in domestic shipments he mentioned is for shipments of FedEx’s Express unit. FedEx experienced significant growth in shipment volume in its Ground Parcel units, with the fastest growth coming from its FedEx SmartPost unit that uses the Postal Service to deliver small parcels to households. What Mr. Page inadvertently uncovered was a great unspoken secret in the courier, express, and postal industry. The reason that FedEx has grown faster that United Parcel Service is that its business model [...] Read more »

FedEx Uses USPS for 30.4% of Ground Shipments

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FedEx’s 2nd quarter earnings release illustrates its business focus on e-commerce and home delivery.   Highlights are as follows: From the press release: “Our improved performance was largely a result of effective yield management programs and strong demand for FedEx Home Delivery and FedEx SmartPost services,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “With the healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services.” Tidbits on FedEx Ground and FedEx SmartPost From the Statistical Book: 30.4% of FedEx Ground shipments are delivered by the United States Postal Service. 8.4% of FedEx Ground revenue is generated by shipments delivered by the Postal Service Revenue per shipment for [...] Read more »

UPS Rate Increase Could Help Priority Mail

United Parcel Service  announced a 4.9% net increase (i.e. rate  increase minus decrease in fuel surcharge) in rates today.  Logistics Management reports on some of the details that suggests that UPS rate changes could provide the Postal Service could increase its competitive advantage in delivering small light-weight parcels or give it more room to raise rates on parcels weighing less than five pounds.  These details include: UPS is raising minimum charges by 6.2%.  The minimum charge is what shippers pay even when their contracts have significant discounts.   UPS minimum charges affect shipments that weigh less than 2 pounds, a market that the Postal Service has the largest market share. UPS’s highest increase is for [...] Read more »