First decline in USPS package volumes in nine years

USPS package volumes for Spring 2019 fell 3.2% year-on-year—the first decline in volumes since 2010. The drop has been attributed to recent operational changes made by FedEx and Amazon.

In its quarterly report, the United States Postal Service explained that some “major customers of the Postal Service have recently begun diverting additional volume from the Postal Service’s network by in-sourcing the last-mile delivery.”

The drop is notable because, despite the financial burdens faced by the Postal Service—it lost $69 billion between 2007 and 2018, and was given just ten years by the government to prefund employee pensions over a 75-year period—online commerce and domestic parcel deliveries are generally on the rise in the US.

Until recently, USPS itself had seen steady volume growth. Yet in the second quarter of 2019, the Postal Service moved 47 million fewer parcels compared to the same period in 2018.

Credit: Abstrakt Xxcellence

USPS didn’t name Amazon or FedEx directly. However, over the last few years, Amazon has been expanding its own in-house logistics operations, reducing its dependence on parcel delivery companies and the Postal Service. It used USPS for just 31% of parcels in July 2019, versus 60% in January 2017.

At the same time, FedEx announced in June that it would be in-housing its SmartPost service, for which last-mile delivery of light parcels had been completed by the Postal Service, as it found it would be cheaper than using USPS.

Last year President Donald Trump formed an administrative task force to investigate USPS finances. However, lawmakers and USPS board members pushed back against what they perceived as possible attempts by the administration to maximise profits at the expense of public service.

Source: Insider