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USPS expecting stronger package growth than rivals at Christmas

Monday, November 10th, 2014

The US Postal Service will be delivering packages seven days per week from next week until Christmas, as it expects double-digit volume growth during this year’s peak season.

The Postal Service said it is forecasting 12% growth in volumes compared to last year’s festive season.

That would beat the 11% forecast by private sector rivals UPS, and the 8.8% year-on-year growth predicted by FedEx this year.

The Postal Service said it is expecting in the range of 450 to 470m packages during this year’s festive season. That would beat the 290m packages expected by FedEx from Black Friday (November 28) until Christmas Eve, but not the 585m packages expected by UPS in December.

“The Postal Service will be out making deliveries every single day during the holiday season, including Christmas Day,” said Postmaster General Patrick Donahoe. “During the holidays, no carrier makes more deliveries to more places than the Postal Service, and this year, we’re raising the bar with enhanced tracking and Sunday delivery.”

Donahoe said the Postal Service had enhanced its network to make sure the growth in deliveries is handled.

Prices

USPS has been chasing market share in the run-up to this year’s festive season by dropping its prices for parcel delivery in key categories popular among e-commerce merchants.

That compares to rivals FedEx and UPS announcing their plans to raise prices as usual this year.

“The Postal Service is a vital business partner for small and large businesses and lowering shipping prices will save them money and improve their bottom line,” said Nagisa Manabe, USPS chief marketing and sales officer. “With our affordable shipping options, we hope to attract new business customers and become their preferred delivery service.”

According to the latest financial date released by USPS, its shopping and package volumes have grown 8.2% year-on-year in the 11 months up to August 2014. The Postal Service shipped 3.69bn packages and express items during the period.

Shipping and package revenue have also grown by 8.2% year-on-year in the 11 months up to August, to $12.3bn.

The package business is seen as the key area of growth for the Postal Service as it seeks to counter the decline of its letters business. Mail volumes in the 11 months up to August fell 2% year-on-year to 138.4bn, with revenue growing 1.4% to $46.3bn, with the important First Class Mail service seeing volumes down 3% year-on-year and revenue up 0.9% to $26.2bn. Mail figures will have been lifted by election mail volumes this year.

Source: Post&Parcel/USPS

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