Congressional Plan for 21st Century Freight Transportation Must Include the Postal Market

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This Wednesday, the 21” Century Freight Transportation Panel of the House Committee on Transportation and Infrastructure will hold a hearing on the importance of freight transportation to the U.S. economy.  The Panel will receive testimony on the current operation of the freight network, what challenges impact its performance, and what can be done to improve the efficiency and safety of freight transportation. The Committee will hear from Fred Smith, Chairman, President, and CEO of FedEx Corporation; Wick Moorman, Chairman, President, and CEO of Norfolk Southern Corporation; James Newsome, President and CEO of the South Carolina Ports Authority; Derek Leathers, President of Werner Enterprises; and Edward Wytkind, President, Transportation Trades Department, [...] Read more »

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 »

Delivered Retail Sales hit 26.5% in January

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Retail sales delivered to the consumer hit 26.5% of all deliverable retail sales in January 2013.  The proportion of retail sales that are delivered rose from 18.3% nearly 5 years ago and  14% a decade ago.  Current trends, which have been consistent for a number of years project that almost half of all retail sales that can be delivered will be delivered by the end of this decade. Deliverable retail sales is defined a  department store types of merchandise and are sold by retailers selling furniture & home furnishings (442), electronics & appliances (443),   clothing & accessories (448), sporting goods, hobby, book, and music  (451), general merchandise (452), and office [...] Read more »

Top 10 Transportation Stories of 2012 and How They Affect the Courier Express and Parcel Industry

Dan Goodwill

Dan Goodwill, the President of Dan Goodwill & Associates, a leading provider of freight management consulting services to shippers, carriers and 3PL’s throughout North America has just posted his list of the top 10 transportation stories of 2012.  While a nearly all of them affect the U.S. and Canadian competitors in the courier express and postal (CEP) industry, the following are likely to have the biggest impact on  impact on the industry in 2013 and beyond. Same Day Deliveries in the Retail Sector Mr. Goodwill notes that: The internet has transformed a number of industries such as books, electronics and music.  Each year, many consumers are increasing their online purchases of a [...] Read more »

If the USPS Is In Trouble, Why Did Mailing Industry Stocks Rise Sharply?

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Today the Postal Service reported its financial results for fiscal year 2012.    Headlines of the wire services and major newspapers all suggested that a calamity is just around the corner. Bloomberg - U.S. Postal Service on a ‘Tightrope’ Lost $15.9 Billion   Washington Post - Postal losses cap year of payment defaults, little help from Congress; more red ink in 2013   Reuters – U.S. Postal Service has record loss, sees “fiscal cliff”   Wall Street Journal - U.S. Postal Service Reports Record Loss   Associated Press - Post office reports record loss of $15.9B for year   Pittsburgh Business Times – Postal Service: ‘Far short on liquidity’   How Did Postal Industry [...] 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 »

Is the Growth of Parcel Delivery Accelerating?

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The post, Growing USPS, UPS  and FedEx Volume Is Not Just from E-commerce, used an exponential trend-line to illustrate the rapid growth in the share of deliverable retail sales that are delivered.   However, reports from retailers about the relatively recent growth of their e-commerce business raised questions about the possibility that the shift toward delivered retail sales may be accelerating.  To test this hypothesis, I plotted two exponential trend lines.  One using data from 1999 through 2007 and a second .   using the data from 2008 – 2012 The plot of the two trend lines can be seen in the following chart.   As was expected the trend for the 2008-2012 data is growing [...] Read more »

United Parcel Service Earnings Report Has Good News for the USPS

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United Parcel Service reported earnings press release today provides hints of a changing parcel delivery marketplace that favors the parcel delivery services that the Postal Service does best. Volume grew across all products as ground rose 3%, UPS Next Day Air® increased 5% and deferred air climbed 8.6%. The majority of the improvement was driven by large e-commerce customers shipping low-weight residential packages. The shift to residential deliveries has resulted in UPS’s revenue per piece rising far less than its change in rates from a yar ago.  UPS states that the change is due to a customer and product mix.  The change in customer mix describes the growing proportion of UPS”s [...] Read more »

Examples of Proprietary Address at Amazon and the USPS: It’s Not Just the Format

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The posts, Amazon Goes Head to Head with USPS with Parcel Lockers in Virginia, and Amazon Has 30 Parcel Lockers in Manhattan, Queens and Brooklyn asserted that Amazon parcel lockers are proprietary addresses. This raised two questions.  1) What constitutes a proprietary address and 2) Is Amazon using a unique addressing standard for its parcel lockers. What is a Proprietary Address A proprietary address is any address that limits who may send or deliver to that location.  Amazon’s parcel lockers are proprietary as only shipments shipped by Amazon and sold by Amazon or a merchant that uses fulfillment by Amazon has access to the Amazon’s Parcel Lockers. No other merchant [...] Read more »

Amazon Goes Head to Head with USPS with Parcel Lockers in Virginia

Amazon Locker in 7-Eleven

Amazon has now introduced parcel lockers to a third metropolitan area in the United States by installing seven parcel lockers in seven 7-Eleven’s in Northern Virginia. By installing parcel lockers in the same general geographic area as the Postal Service, Amazon clearly indicates that its parcel locker delivery system is a direct competitor with delivery by the U.S. Postal Service, United Parcel Service and FedEx. While Amazon’s parcel lockers are in the same general geographic area, Amazon has made some real estate and operating/software decisions that may provide Amazon with a competitive advantage among customers that find locker delivery attractive Amazon’s Lockers are in More Up-market Zip codes than Gopost Amazon [...] Read more »