(Almost) Nothing Stops the US Mail
Lost packages. Late packages. Packages lingering in an unknown location within a postal facility. Welcome to ecommerce in 2020.
At a time when a global pandemic shutting down in-person commerce all over the country and even the world, one might think this is a golden opportunity for merchants conducting business online. And it is. With one exception.
Logistical wrangling related to a shakeup at the United States Postal Service have intervened to present a full-scale nightmare scenario for consumers, direct mail marketers, and especially ecommerce vendors of all sizes hoping to get essential and non-essential goods to customers in a better-than-timely manner. In the early stages of the Covid-19 pandemic, delays were anticipated and experienced, but those leveled out as the USPS stepped up.
With the installation of a new Postmaster General in June, the directive is clear: cut costs and increase efficiency, even at the expense of a desperate public. The seismic shift has left analysts, public officials, and especially online shoppers scratching their heads. A provision in the US Constitution sets forth a postal service to be established and monitored by Congress. Its purpose back in the day was to transmit important correspondence from Point A to Point B at a time when planes, trains, and automobiles were more than a century away from reality.
After jockeying for the top spot as a favored shipping service, the USPS competed with UPS, DHL, and FedEx to curry favor. Enter ecommerce giant Amazon, the most prolific internet seller, and the picture changes with a contractual agreement. USPS is the most heavily used service for Amazon and other sellers of all sizes. Even its competitors use USPS for rural deliveries. Now its very future is in question.
Congressional hearings aimed at a fix were driven by another critical function of USPS: mailed ballots in elections around the nation. Proposed rollouts of changes impacting sorting and delivery were allegedly halted as a result of hearings and a public outcry in early August, but insiders hint at a continued decimation of service. Consumers report receiving letters and packages weeks after shipment. The volume of lost mail has spiked.
USPS reports an on-time delivery figure at 93.7 percent. It sounds reasonable, but considering the volume of commerce routed through USPS, that means hundreds of thousands of packages are still stuck in limbo, at the mercy of an unstable service undergoing a major transformation.
With political pressure from the current presidential administration to raise rates, USPS is poised to face an insurmountable hurdle that could also be a nonstarter for ecommerce sellers hoping to make online shopping more affordable for both them and their customers. The agency recently announced an increase to its price structure, but cautions that it is temporary only, set to lift after the critical seasonal holiday shopping period.
Sellers want to know why the concept of volume-driven marginal rates has not kept price increases at bay, and to date, there are no good answers coming from the USPS. The best hope for small and large merchants is a continued level of pressure applied by both Congress and regulators to separate politics from policy. If voices are loud enough, we may see a return to some level of normalcy.
Until then, ecommerce merchants must be prepared for all scenarios, studying costs of using alternative carriers, considering honest communication for an extended delivery time with purchasers, and pricing structures that may help keep their business afloat.