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US Postal Service - Strong Service Levels via OCS Worldwide

There is much press coverage at the moment about the pressure the US Postal Service operates under, particularly with the US election looming and the need to handle postal votes efficiently.

The USPS has been loss-making for some years. It is unusual as it’s regulated federally yet is financially independent. It has the US universal service obligation but needs to cover costs from directly generated revenue – a difficult balance which downstream access competitors such as UPS and FedEx do not have to make.

Pressure on the USPS has been growing through huge increases in import parcel volume as the global ecommerce market has grown. Until a few months ago the USPS was unable to independently fix delivery rates for mail arriving from China, Europe and other large ecommerce shipping regions. July saw the situation adjusted with increases in US mail delivery costs reflected in the tariffs to the US from Royal Mail and others.

The ability of the USPS to reach private addresses is unique. The ecommerce operations of UPS (mail innovations), FedEx (Smartpost) and DHL (ecommerce) all access the USPS last mile infrastructure. For the first time, in 2020 USPS will surcharge delivery over the Peak period (October to December) to reflect the additional workload. The surcharges apply to non-retail parcels only with the largest surcharges applied to the downstream access services which are utilised by the USPS competition.

OCS has been a USPS partner since 2006. Initially as a “Postal Qualified Wholesaler” and then as the first “Global Direct Entry” partner when the programme was launched in 2013. The partnership is much more than a commercial arrangement. OCS utilises USPS training resources and completes hub and service reviews across the US annually. USPS representatives review OCS services in the UK, which included a visit from the recently retired Postmaster General, Megan Brennan, to OCS at Heathrow in 2017.

The US Postal service provides delivery services by air or via surface transfer. Surface delivery windows are typically 2-9 days. Low cost delivery via downstream access is typically completed by surface delivery and volumes are pushing the delivery times back, although still within the commitment. Premium services such as Priority Mail, Priority Mail Express and First Class Parcel are conveyed by air and continue to be delivered within the 2-4 day domestic delivery aim.

OCS monitors US service performance closely and the current Coronavirus crisis presents multiple challenges. To reduce the last-mile distances, and to spread the draw on airline capacity OCS now ships daily into New York, Miami, Chicago, Dallas, San Francisco and Los Angeles. Working with British Airways, American Airlines, Virgin Atlantic and United Airlines spreads the load further and allows greater capacity to be accessed over Peak when volumes surge.

OCS ecommerce delivery time to the USA during July was 4.24 working days on average. Rely on us to support your US business through challenging times.