specialreport
BY MARK B. SOLOMON, SENIOR EDITOR
The U.S.
Postal parcel
Service
Parcels may not save the USPS, but they may help the Eagle
fly above the digital tsunami until it somehow rights itself.
IN A FAMOUS SCENE FROM THE 1967 FILM “THE
Graduate,” a man approaches recent college graduate
Benjamin Braddock at a party and whispers one word of
advice in Braddock’s ear about his future career:
“Plastics.”
In that spirit, one can almost envision Benjamin
Franklin, the founder of the U.S. Postal Service (USPS),
pulling Paul Vogel, USPS’s president and chief marketing
and sales officer, aside at a function and whispering one
word in Vogel’s ear about the post office’s direction:
“Parcels.”
Unlike Braddock, who recoiled at the idea of choosing
plastics as a career, the 61-year-old Vogel, who runs all sales,
marketing, and domestic and international product devel-
opment and management, would likely be receptive to
Franklin’s advice. Though far from being the tail that wags
the postal dog, parcels are becoming an increasingly critical
part of the quasi-governmental agency’s present, and more
importantly, its future.
“It’s a growth area,” Vogel said in a recent interview with
DC VELOCITY. “The shipping industry is doing well for us.”
Vogel has good reason to be upbeat about USPS’s place in
the parcel world. The growth of online commerce from all
sources—computers, mobile devices, and social media—
plays to the strength of the USPS’s infrastructure, which is
built around handling packages weighing one to five
pounds—the typical weight range of an online shipment—
and delivering them to any address in the United States at a
And there is more of that growth expected to come.
According to Forrester Research and Booz & Co., the value
of all U.S. online sales—excluding groceries—will hit $324
billion by 2015, up from $204 billion in 2011. Those projections do not include the cost—and potential revenue—
involved in handling the returns of products bought online.
Vogel said he’s focused on strengthening USPS’s niche,
which is moving large quantities of parcels from merchants,
fulfillment houses, and parcel consolidators to millions of
residences. By contrast, Vogel is steering the agency away
from the corporate business-to-business parcel category
dominated by its rivals, and its partners: FedEx Corp. and
UPS Inc.
“I am a harsh realist,” he said. “Our strength is with the
consumer and the small business.”
Vogel also believes USPS is in the sweet spot of the ship-
ping segment. “I would question how much the [business-
to-business] market is growing,” he said. Vogel said USPS
speaks regularly with businesses that would like to enter or
expand into the consumer market but have yet to do so or
as yet have made minimal strides.
WANTED: NEW BUSINESS
The surge in online shopping and shipping can’t come soon
enough for USPS, which desperately needs new revenue
sources to offset the declines in products like first-class mail
that are being cannibalized by digital transactions.
