The U.S. Postal Service has lifted the curtain on a recently launched offering designed for fast regional shipping.
Priority Mail Next Day, a service geared toward e-commerce retailers, aims to bolster the agency's competitive standing versus FedEx and UPS while helping address evolving delivery expectations.
"Consumers want speed," said Jamie Cousin, a USPS regional sales director, during a Thursday webinar for shippers. "We heard directly from customers saying speed is so important to them, and now you can give them speed affordably."
Beyond consumer preferences, the webinar provided further details on how Priority Mail Next Day works. Here are three key questions Cousin and other agency officials answered during the event regarding the service's capabilities, coverage and pricing.
What does Priority Mail Next Day provide?
Priority Mail Next Day is a contract-only USPS service providing overnight delivery of packages up to 20 pounds. It can ship to addresses within 150 miles of eligible processing centers.
The offering is regional, meaning pickups and deliveries occur in the same area. The service could be helpful to shippers looking for faster service within a particular region, according to Bill Fraine, senior VP of national sales.
"If you say, 'Hey, I really want to be stronger in the New England area,' you can hit the plant that covers that area by trucking it out of your distribution center and drop it in there, and then have an overnight out of there," Fraine said.
Volume must be entered by 6 p.m. at an eligible regional processing and distribution center or local processing center to ensure overnight service. If volume doesn't reach the facility by the cutoff time, it will be delivered in two days instead.
Transportation to the facilities has to be set up and discussed ahead of time with USPS, Fraine added.
"You can't just show up and drop it off. So that's something you reach out to the salespeople for," he said.
Where is Priority Mail Next Day offered?
The service is currently available in 62 markets nationwide, with more locations coming soon. Its pickup coverage within these markets is more limited than its delivery reach.
Number of ZIP codes, people and businesses Priority Mail Next Day can reach
| Package pickup | Overnight delivery | |
|---|---|---|
| ZIP codes covered | 3,000 | 6,300 |
| Population reach | 45 million | 75.8 million |
| Business reach | 6.4 million | 10.4 million |
Source: U.S. Postal Service webinar
Shippers can find Priority Mail Next Day's current coverage area and determine eligibility for their shipments through the Postal Service's website. For example, for the 95691 ZIP code near Sacramento, next-day service coverage reaches over 4.3 million people and 157,000 businesses.
The Postal Service plans to eventually expand coverage nationwide after seeing how the service performs in its initial markets, although officials did not provide a precise timeline for that rollout. In January, the agency said Priority Mail Next Day would eventually reach around 295 million people daily.
"Look at what we're doing right now as an early rollout, no different than a restaurant chain may roll out a certain set of food in certain markets to test it," Fraine said.
For now, customers with overnight shipping needs in ineligible markets can still find ways to tap into Priority Mail Next Day. Fraine said a USPS customer in Louisville, Kentucky, a market that doesn't have the service yet, is transporting volume to the nearby city of Lexington. The service's 150-mile radius out of Lexington "gets you pretty close back to Louisville," he added.
What is the service's pricing?
With Priority Mail Next Day being contract-only, rates are negotiated on a per-customer basis.
However, Fraine said the USPS is taking an aggressive pricing approach for the offering, similar to how the agency has handled rates on the fast-growing Ground Advantage service. The Postal Service can afford to do this since the volume is being added to existing transportation and sortation processes, rather than adding new capacity to take on the additional deliveries, he said.
Partially contributing to the aggressive pricing is Priority Mail Next Day's lack of an on-time delivery guarantee, limiting the agency's risk, Fraine said. However, the agency still plans on consistently achieving overnight shipping speeds.
"The expectation is that this will be delivered next day, but we don't have a guarantee on it, because when we do have a guarantee on it, we have to raise rates, right?" he said.
Priority Mail Next Day also doesn't feature surcharges common among private carriers like residential or rural delivery fees, according to Cousin.
"We are so straightforward," she said. "It's what you see is what you get when you're dealing with us. And so that stays true in this Priority Mail Next Day product."
