Additional Indicators that Online Shopping is Changing the U.S. Economy

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Two stories today illustrate how e-commerce is changing the U.S. economy. First, there are indications that demand for shipping boxes is rising fast enough to give the manufacturers of containerboard used to make these boxes sufficient market power to both raise  prices and make price increases stick.   Investment Analysts from both Goldman Sachs and Jeffries both released Goldman Sachs both raised their ratings of containboard manufacturers to reflect their belief that the pricing power that these manufacturers now have is sustainable. Second, in its conference call yesterday, Wolverine Woldwide, a manufacturer of a broad range of casual and work shoes and boots stated that nearly 15% of its sales were [...] 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 »

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 »

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

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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 »

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 »

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 »

Who failed, Amazon or the USPS?

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Note:  A number of readers identified a serious error in the original version of this post.  The post has been modified to reflect a better understanding of why the Point of Sale System limited the products that the clerk offered to Mr. Jarvis. 1/12/2012 17:47 Jeff Jarvis, an influential social media evangelist and author of the Buzz Machine, had a problem. He bought a book from Amazon and wanted to return it. Sounds simple, doesn’t it? However, when he went to the Postal Service, he was told his only option was Express Mail, the most expensive service the Postal Service offered. So what did he do? He took the parcel and [...] Read more »

A Close Up Look at gopost

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The gopost parcel lockers appear all but ready for live customer tests. Viewing one in person clearly showed to me how a customer thinking of using a gopost would interact and how it would work for both able and disabled individualsm, as well as adults of a full range of heights. What a Customer First Sees A customer interested in using gopost will have no trouble finding it.  The bright red and blue colors make it stand out, just like Redbox and Blockbuster kiosks do.    The use of color focuses the consumers attention right where they have to go, the center console. Given that it is both bright red and stands out a [...] Read more »

Why Mail Matters: L.L. Bean

On March 24th, L. L. Bean announced that it will offer free shipping on all shipments no matter how small.   L. L. Bean can afford to do this because many of its light weight shipments and delivered through the Postal Service either through a direct contract with the Postal Service or through a consolidator like FedEx’s SmartPost or UPS SurePost.   L.L. Bean is not alone in offering free shipping.  Firms like Newegg.com use free shipping on specific items to shift customer demand toward certain items and away from others.  Landsend offers free shipping offers to e-mail subscirbers on a regular basis  Other firms require minimum purchases ranging from $25 for Amazon.com to $99 for Macy’s.   [...] Read more »

Why the Postal Service Matters: UPS Surepost

FedEx has been offering a branded joint-line service with the Postal Service for some time now.   United Parcel Service will likely soon market its joint line service under a new name “UPS Surepost” rather than previous unappealing name, “UPS Basic.” The name UPS Surepost name was trademarked in 2010.   The name does not appear on UPS’s website but based on posts on Able Commerce Shopping Cart Software and Browncafe, it appears that UPS is test marketing the brand and the service.  Information on UPS Surepost is also available on a web page dedicated to UPS Worldship software. Information available on this servcie from the Worldship help information is as follows: The [...] Read more »