According to an August 9, 2019 Wall Street Journal article, package delivery volume at the US Postal Service dropped in the USPS’s most recent quarter for the first time in nine years. The article attributed the volume reduction in part to the fact that delivery competitors such as UPS and FedEx appear to be keeping more “last mile” package delivery orders in house. As a means of controlling costs, such delivery competitors have often been customers of the USPS for such “last mile” deliveries.
As an indicator of the trend, FedEx announced in May of 2019 that, “Nearly two million FedEx SmartPost packages that were previously given to the U.S. Postal Service for delivery to homes . . . will be increasingly integrated into FedEx Ground operations and delivered by the same service providers currently handling FedEx Ground residential packages.”
Increasing development of “last mile” delivery capabilities by UPS and FedEx is significant for the USPS because the USPS has recently relied on increases in package delivery volumes as a means of offsetting revenue lost due to reductions in first class mail delivery. However, the article noted that although the quarterly results showed a 3.2% reduction in package delivery volume, package delivery revenue increased 4.8% because of higher prices and growth in package options such as Priority Mail and First-Class Packages.
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