Shipping services such as FedEx and UPS have gained in popularity over the past 12 months, according to recent reports. With more than 98 percent of federal government mail being sent via a private sector shipping company, the U.S Postal Service is struggling to gain a share of this market.
Lack of Sales
Without the sales force behind shipping services such as UPS, the Postal Service was slow to get off the ground in bidding for federal agencies administration contracts, losing out to the private companies. Since 2001, UPS have been the official choice of federal agencies across the US.
Cost to the Government
It would cost the government more to ship via the Postal Service than via these private shipping services, as private companies are able to undercut competition, making their prices more competitive. Postal legislation will be looked at by the Senate Majority Leader Harry Reid in 2013, as postal rates are overseen by Congress. Agencies in the US spent almost $337 million on shipping last year.
Postal Service Changes
The Postal Service is looking to make changes in its pricing structure in 2013, as well as implementing payment methods which are more customer-friendly; it’s hoped that this will boost shipping business received from the government, however it’s not known how much revenue the Postal Service could hope to gain from these moves.
In 2013, we could see the profits of private shipping companies such as FedEx and UPS dip, as federal agencies make a move to use the US Postal Service for their shipping requirements.