class and standard mail. “Even if they doubled the number
of parcels overnight, it’s such a small contribution to their
income statement that it’s like a pimple on the butt of an
elephant,” he said.
Steve Rifai, managing director at Dymo Endicia, a Palo
Alto, Calif.-based firm that provides automated workflow
solutions to large postal users, agreed that the parcel business, in and of itself, will not cure USPS’s ills. “However,
without parcels, the problems will be much more difficult
for USPS to overcome,” he said.
Rifai said Endicia’s customers tendered $1.5 billion of
parcel business to USPS in 2011. That figure is expected to
grow by between $300 million and $400 million in 2012, he
said. Rifai forecast that parcels will eventually bring in half
of all new postal revenue on an annual basis.
IMPROVING THE PROPOSITION
USPS, which estimates that it handles 29 percent of all U.S.
shipping volumes, said it is being as aggressive as possible to
boost its shipping value proposition. It has developed flat-rate packaging configurations for its Express Mail and
Priority Mail products, allowing users to cram as much
material as will fit in a box for a flat rate shipped anywhere
in the United States.
Megan O. Brennan, who as USPS’s executive vice presi-
dent and chief operating officer oversees what may be the
nation’s most complex distribution network, said she and
her team are also exploring the possibility of expediting
delivery schedules of Priority Mail, which are currently
marketed as two- to three-day deliveries. “We want to
stretch our capabilities to see how much of the second-day
network we can advance into the overnight mail system,”
she said in an interview.
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