USPS announces price increases for 2020

The U.S. Postal Service announced price increases on Mailing Services, Priority Mail, Priority Mail Express and other product-specific shipments starting Jan. 26, 2020. These changes are further indicative of an overall financial decline in the personal parcel-shipping industry. These changes will be implemented in response to a USPS parcel volume decline for the first time in nine years -according to its Q3 earnings report. After increasing rates in 2019, USPS saw a 3.2% year-over-year volume drop resulting in a loss of nearly $2.3 billion. USPS executives appear to be alluding that competition and legislation are to blame. With the company historically relying on customers purchasing shipment of packages and/or letters, and a market increasingly moving towards electronic communication and online shopping, USPS will be attempting to make up lost revenue sources through an increase of shipping rates in 2020 by consolidating a beginning and mid-year increase in its first 2020 quarter.

Contrast USPS’s financial strategy with that of UPS, which announced a recent partnership with Shippo, an e-commerce logistics solutions provider, to offer a 55% cost-savings on shipping for online retailers. As last-mile delivery becomes dependent on ecommerce and relationships with online retailers, logistics providers will likely need to adapt to a changing industry, and provide a service that offers value for modern-day consumers. People will always need to ship items, but market trends are moving away from personal parcel shipping to suppliers shipping items directly to consumers/store locations. Is USPS’s business and financial strategy tailored to a declining industry? A market reaction and continual evolution will provide the answer.

Forde, Morgan. “USPS Announces Price Increases for 2020.” Supply Chain Dive, 10 Oct. 2019, https://www.supplychaindive.com/news/usps-announces-price-increases-for-2020/564739/.

Forde, Morgan. “UPS Partners with Shippo, Offers 55% off Shipping for Online Retailers.” Supply Chain Dive, 9 Oct. 2019, https://www.supplychaindive.com/news/ups-partners-shippo-offers-55-off-shipping-online-retailers/564703/.