Earlier this year the Postal Service announced a new suite of services that they had titled USPS Connect. A new agency report has revealed how in the first 3 months of market testing, one next-day service product has made just $191 in revenue.
USPS became very aware of the competition they face from the likes of FedEx and UPS’s next-day services and aimed to close that gap with new services under the Connect umbrella.
The bad news for USPS is that in the 3 months from January to March of 2022 the USPS Connect Local Mail service handled just 65 parcels even though it was available in over 800 locations across Texas. For those interested the Local Mail report can be seen here.
USPS Committed To Longer Testing Period
Whilst the first 3 months of the service rollout have not been regarded as a success USPS is committed to its longer testing period. The postal service plans to run the Connect Local Mail market test for two years with a phased rollout nationwide. Since this initial report only focused on January to March, the Postal Service has been expanding Connect Local Mail’s coverage throughout the U.S., including Wisconsin in June and the Evansville, Indiana, area in July.
The Local Mail Connect service provides same-day or next-day delivery to addresses served by the local post office. It’s designed as an “economical alternative” for shippers regularly sending documents in their local area, rather than over the longer distances that many of USPS’ services are designed and priced for.
“While today Connect Local has not been price-competitive, they are very much in the drawing board stages,”
“They’re trying to figure out exactly where they fit in the marketplace, and we do expect them to get much more competitive as time goes on. Rolling out the service has come at a cost. The administrative and startup costs for Connect Local Mail between Jan. 9 and March 31 totaled $531,584,” said Gordon Glazer, Senior Consultant, and USPS Specialist at Shipware.
The postal service is hoping to see savings through a new operational model being used to fulfill Connect Local deliveries, with parcels staying at the local post office for processing and delivery rather than being moved into the agency’s plant network. This new model is part of the USPS Delivering For America Plan to make the postal service self-sustaining and profitable in the next 10 years.
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