Dive Brief:
- The U.S. Postal Service aims to "better utilize and monetize" its first-mile and last-mile capabilities through expanded services for both small and large shippers, Postmaster General and CEO David Steiner said in a board of governors meeting Friday.
- Steiner said ongoing negotiations with UPS to assist with Ground Saver deliveries is an example of this push. He added that the Postal Service is "also in talks with similarly situated companies for expanded last-mile service."
- The Postmaster General said the agency wants to "open up the last mile" for same-day and next-day delivery services for retailers, as well. "We've begun discussions with a number of retailers, and the desire for fast, reliable and affordable delivery is certainly strong among all retailers," he said.
Dive Insight:
While light on details, Steiner's comments signal a new phase in the financially ailing agency's push to compete with FedEx and UPS and drive more revenue. They also suggest a shift from the Postal Service's network utilization strategy under its previous leader, Louis DeJoy.
DeJoy shook up long-standing partnerships with package consolidators in a bid to have more volume flow through the full Postal Service network, rather than incentivizing consolidators to drop off parcels at facilities one step before delivery. The shift pushed UPS to stop using the agency for deliveries under its SurePost product, now called Ground Saver, and forced major shipping partners to adjust their last-mile strategies.
The goal was for the agency to utilize more of its processing and distribution assets while developing more direct ties with shippers. However, Postal Service stakeholders have criticized the approach, saying the agency would be better off encouraging more package dropoffs closer to the end consumer while leaving middle-mile work to private companies.
But Steiner on Friday didn't call for the Postal Service to revert back to its pre-DeJoy approach to consolidators. Rather, the postmaster general outlined an expanded vision for how shippers can leverage the agency's first- and last-mile facilities.
"We previously encouraged access to this valuable asset for only a few high-volume customers," Steiner said. "I believe this undervalued our reach, limited business partnerships and restricted revenue generation."
The Postal Service's advantages include its ability to go to every U.S. address at least six days a week, Steiner said. Despite on-time delivery struggles amid its network overhaul plan, the Postal Service has achieved strong service performance scores in terms of its last-mile transportation, according to Steiner.
Beyond deliveries, the Postal Service should also push to "be the most convenient returns facilitator" in the country, according to Steiner. The agency can leverage its first-mile footprint of over 33,000 facilities to do so, he added.
"Simply put, we have the capacity to meet a much larger percentage of America's shipping needs," Steiner said. "We just need to utilize our assets efficiently and effectively."
