DC Velocity - October 2014

34 DC VELOCITY OCTOBER 2014 www.dcvelocity.com tr a ns p ort at i o nr ep o rt

PA R CE L E XP R E S S

house and distribution footprints to shorten transit times.

Those who follow the business said concerns about USPS’s service issues are overblown. While some diversion may take place during peak season, it won’t become a deluge, according to Jerry Hempstead, a former top parcel executive who now runs a consultancy bearing his name. Jones said USPS is unlikely to face delivery challenges from entities like parcel consolidators and big shippers like Amazon.com because those entities generally induct packages into the last node of the postal system before delivery to the customer, thus minimizing the risk of bottlenecks borne by users that tender parcels at the front end of the system. Mark S. Schoeman, president of The Colography Group Inc., a consultancy, said that USPS has demonstrated an ability to flex its system to handle surges in traffic and that it should be able to accommodate any holiday rush without dramatically adjusting its operations.

Rob Martinez, Shipware’s president and CEO, said USPS
will attract more packages because it offers a wide menu of
reasonably priced services, and not because it isn’t adopting
a new form of dimensional pricing on short-haul ground
shipments. Martinez added, though, that if USPS wants to
sustain parcel growth, it must bring on larger vehicles and
invest in advanced technologies to improve package flow as
well as its routing and dispatch capabilities.

Joseph Corbett, USPS’s CEO, said in a mid-August statement that the post office needs to spend up to $10 billion to upgrade its fleet, buy package sorting equipment, and make USPS cannot afford to postpone these steps. Its “shipping and package” segment, while still accounting for a small piece of the agency’s overall revenue mix, is one of the few parts of the business showing solid growth. Through the first nine months of its current fiscal year, which ended Sept. 30, revenue from the segment grew 9. 7 percent and volumes increased 8. 5 percent.

USPS reported a $2 billion net loss in the third quarter, weighed down considerably by a required $5.7 billion payment for prefunding retiree health benefits; USPS said in mid-August that it would be unable to make the payment by the Sept. 30 deadline unless Congress acts before then to eliminate the liability. At this writing, the issue remained unresolved.

“Package growth is the Postal Service’s only hope to maintain solvency,” said Martinez.

Advanced technologies are critical to warehouse-based 3PL success. Identifying needs and areas of improvement and sorting through a multitude of technologies and software can be an overwhelming task. This course brings together the latest innovations and products (and their manufacturers) with the best warehouse IT and operations leaders. The conference is full of peer-to-peer sharing of business and technology challenges and discussion about solutions. The expo portion of the event gives attendees an opportunity to learn about new products from manufacturers via hands-on demonstrations.