The USPS just announced three new changes to their Priority Mail® Service that could make a big impact to reduce your shipping costs and give you a reason to shop rates against the private carriers.
- Improved Tracking – At the start of the year they made every Priority Mail® item traceable at no cost. (You used to need to add the $.75 Delivery Confirmation Label or submit the tracking number electronically.)
- Free Insurance on Every Package – They are offering up to $50 of insurance on every item ($100 if you are a high volume shipper and qualify for their Commercial Plus Rates). This is a way to level the playing field with the private carriers that offer $100 of insurance for free.
- Day Specific Delivery – They will let you know based on your zip code when you can expect delivery.
While all of these changes are great, I feel that the biggest impact is the Day Specific Delivery which needs the most focus. Many customers turned away from Priority Mail® because it could not give a specific delivery date. We would hear 1-3 days but there was nothing concrete. Now you can go to https://www.usps.com/priority-mail/map/ and enter your zip code to find out when you can expect delivery. I live in Massachusetts and I typed in my zip code as you can see below. I was impressed with a few items:
- They show where the item will get next day delivery. I spoke to a postmaster who said this is typically determined by where they can drive the item in 2 hours.
- The majority of the country, including the west coast, will get 2 day delivery.
- The areas that get 3 day delivery are in less populated regions. I ran this map again as if I lived in Chicago and the 3 day areas stayed the same. This could indicate that they base this on specific zip codes, not distance.
Now that customers can get specific day delivery, it may make sense to compare rates to the private carriers, especially on the light weight items going to residences. When you look at the chart below you can see the differences in rates and delivery times for 2 common light weight items going to Zone 4. A 1 LB Priority Mail® item will cost $5.35 and arrive in 2-3 days (Mostly 2 days as we see from the chart). The private carrier is $6.41-9.30 for 3 day service and $13.40 for 2 day.
Next you need to look at the extra fees that the private carriers charge that at a minimum is 7-10% in Fuel Surcharges. If the address is residential, or going to one of 23,700 zip codes, there are further fees.
Many of you are saying that you have huge negotiated discounts, which may be true, but you have to look at the final price of the item to compare. Also, many private carriers may have a minimum package fee that the item cannot go below regardless of your discount.
Now nothing in the world is perfect. The downside with Priority Mail® is they will not guarantee that the item will be delivered on these dates as the private carriers do today. This means if the item is late, you will not get a refund. You have to weigh the tradeoffs and how important this is to your goals. If the USPS is putting this map together, they have to be pretty confident in their delivery time frames. You might ask your postal representative if they have numbers indicating the percentage of items they are getting delivered by their quoted objectives.
It is clear from these changes that the USPS is trying to be a force in the package shipping market. They have the best final mile delivery network and they are investing heavily in their infrastructure. This means that you now have another option to consider that could save you money. If you are shipping light weight items or to residences, I would strongly recommend you look at Priority Mail® and how the new services could impact your business.