GENCO Canada
We’ve all seen them, those signs in restaurants and other retailer establishments
that stare us down forebodingly:
No shoes, No shirts, No service!
No ambiguity there. You know exactly what it’ll take to get in the door. But in the parcel world, private carriers’ claims about paying for “guaranteed service” aren’t as clear-cut as you might think.
As the new “challenger brand” to FedEx and UPS in the United States, the USPS, unfortunately, suffers a perception problem: Its service does not equal the other two competitors. In reality, though, the USPS has come a long way, and in 2009 achieved a 96.4% express mail service performance. This, despite an ever-changing domestic network and a weak economy.
The USPS also has a mind-set that you report service performance close to the real number with limited “exceptions.” As stated in the DMM in section 414 (3.0), most of the USPS’ postage refunds are limited to some significant events that affect the company’s network, such as war, civil disturbance, weather, and acts of God.
So, how accurate are the service results of private carriers? How many “exceptions” do they allow?
The following table shows the exceptions that private carriers consider in their service guarantee.
As you can see, FedEx, UPS, and other private carriers consider significantly more exceptions in their analysis than the USPS does. Not surprisingly, these private carriers tend to boast inflated service levels, usually in the 99%+ range. At the same time, the private carriers have done an excellent job in maintaining their cost structures and service levels.
| Exception | Private Carrier | USPS |
| Origin Overlooked Package | Yes | N/A |
| Customer Delayed Package | Yes | N/A |
| Incident/Accident | Yes | N/A |
| Weather Delay—High Winds | Yes | N/A |
| Local Delay | Yes | N/A |
| Mis-sort | Yes | N/A |
| No Destination Scan | Yes | N/A |
| Missing POD | Yes | N/A |
| Temporary Local Delay | Yes | N/A |
| Non-Private Carrier Clearance | Yes | N/A |
The USPS faces the same issues and challenges as the private carriers. Yet, with fewer exceptions, has attained nearly equal service levels as the others.
The USPS is definitely a player in the United States, bringing the appropriate technology and service offerings to the market. As such, the USPS should be invited to all small parcel bids (make a mental note, parcel consultants) and evaluate the best strategic fit. A good place to start might be 1 to 5 pounds (B2C).
So as the USPS continues to make strides with its innovation and achieves consistently high service ratings, it’s clear: The USPS has arrived as the new “challenger brand.”
No exceptions.
