Reveel Resources

Can Companies Save Money If They Still Use The U.S. Postal Service?

Companies Can Save Money with USPS

The U.S. Postal Service has been operating since 1775 — before the Declaration of Independence, before the interstate highway system, and well before UPS and FedEx were founded (in 1907 and 1971, respectively, if you were curious).

Though the public agency has often been criticized for long waits and unreliable delivery service, it’s taken significant steps in the last decade. The USPS’s two-day Priority Mail service has become a staple for independent and small-batch sellers. And as private carriers have increased surcharges year after year, the USPS’s no-frills pricing can be a refreshing change.

Depending on your company’s needs, incorporating the USPS into your shipping mix could help you save money.

Related: Comparing Shipping Rates in 2018: FedEx vs. UPS vs. DHL vs. USPS

Pros: No Surcharges, Standard Weekend Delivery

Parcel’s 2017 Carrier Performance Survey found that 84 percent of shippers had used USPS in the previous year, up 8 percent year over year. For comparison, usage of FedEx and UPS fell year over year — only 81 percent of shippers used FedEx, a 4 percent drop, and only 78 percent used UPS, a 6 percent drop.

What’s causing the shift? About 36 percent of survey respondents said accessorial charges were their biggest complaint, and 16 percent were most dissatisfied with pricing in general. USPS charges only flat rates, with no accessorial charges at all.

Generally, USPS is most cost-effective for parcels weighing less than 3 pounds. If your product fits in Priority Mail packaging, you can save as much as $1 per parcel compared to FedEx and UPS rates. These small parcels may even arrive faster than they would with a private carrier — since USPS has fewer service tiers, its top-tier services are slower than private carriers, but its low-tier services are typically faster.

Finally, the USPS has offered free Saturday delivery in all markets for years. UPS and FedEx now offer weekend delivery in large markets, but often charge a fee, and their weekend routes may not reach rural destinations.

Related: Your Guide to Negotiating Better Shipping Rates

Cons: Limited Tracking Abilities, Longer Transit Times

Though a number of surveys show the U.S. Postal Service improving its customer service, it still lags far behind FedEx and UPS in customer satisfaction. In Parcel’s 2017 survey, the private carriers still earned higher customer ratings for package delivery performance, on-time service, refunds and claims processing.

Because the USPS is a government agency and not a private company, it lacks some of the nimbleness of its competitors. Hiring, adding new routes and designing new services take much longer for the USPS than they do for UPS and FedEx. They also take much longer to process refund claims and respond to customer service queries.

Relatedly, because most of the deliveries it handles are letters and small parcels that are not time-sensitive, the USPS offers fewer options than its competitors do. Its rush services are very expensive compared to UPS and FedEx.

Finally, the USPS’s tracking system is not nearly as sophisticated as those of its private competitors. With USPS, packages are scanned every time they arrive at a post office or distribution hub, so shippers can monitor them and estimate their arrival date. But with UPS and FedEx, packages are often tracked at the vehicle level — meaning these companies can give customers estimates about the time of day their packages will arrive, often on an hourly basis.

Consider incorporating the United States Postal Service, but make sure all your needs are met

FedEx and UPS outperformed the U.S. Postal Service on every metric except for price in the 2017 Parcel survey. However, while USPS may still have a long way to go, it’s moving in the right direction — the private carriers’ ratings fell across the board from 2016 to 2017, while USPS’s increased.

As always, making service decisions starts with knowing your own needs. Track as many metrics as you can to understand what you ship, how far it travels and what your clients demand.

The postal service is best suited to small parcels with flexible arrival dates. If that’s a significant portion of your business moving those shipments to USPS could go a long way toward reducing your shipping spend, especially during the holidays.