USPS is increasingly moving packages for its competitors, according to newly published numbers that underscore the Postal Service’s unique delivery capabilities.
For years, United Parcel Service (UPS) and FedEx have paid USPS to deliver some packages, especially for customers in rural areas. The companies are now turning to the Postal Service more frequently, the Wall Street Journal reported earlier this month.
USPS delivers 2.2 million packages a day for FedEx, or about 30 percent of FedEx’s total ground shipments, the Journal reported. Meanwhile, the type of packages handled by the Postal Service account for about 40 percent of the recent growth in UPS’s ground shipments business.
“We make money on it. We wouldn’t do it if we didn’t make money on it,” PMG Pat Donahoe told the Journal.
This rising volume has fueled major growth in the Postal Service’s Parcel Select business, which has surged from about 223 million packages five years ago to 1.29 billion packages in 2013.
Parcel Select, a ground delivery service for large and medium-sized shippers, accounts for about a third of the Postal Service’s package-delivery business. Parcel Select is expected to grow 12 percent next year.
USPS recently announced plans to adjust some shipping prices to attract more business customers. The Postal Service also is streamlining its mail processing operations, which will allow USPS to invest in new package sorting equipment and other upgrades.
“We’ve been focusing a lot of efforts on package growth, because that’s the biggest opportunity for us,” the PMG told the Journal.