US Postal Service says gains package market share

The US Postal Service said on Wednesday it has gained a little market share in package shipments during the last three months even as the volume of standard letters continues to decline. A spokesman for the Postal Service, which delivers mail to 142 million homes and offices, said package shipments have risen “in the high single digits” compared with a year earlier, with the lion’s share of the increase coming from two-to-three day priority shipments and from residential shippers using Internet auction service eBay Inc.’s online postage.
“It’s three things all coming together: access, making it easy to do business with us; price stability; and the good service,” said Jerry McKiernan, manager of media relations for the Postal Service. “When those three things are in combination, that’s a winning formula.”
The recent surge in package deliveries for the Postal Service, according to McKiernan, has translated into a “marginal” increase in market share.

The Postal Service’s gains come amid softness in the business of United Parcel Service Inc. (UPS.N: Quote, Profile, Research) , the world’s largest package delivery company.

Last month UPS reported that domestic package shipments in its fourth quarter rose a scant 1.6 percent, increasing concern that it is losing market share to rivals such as FedEx Corp.(FDX.N: Quote, Profile, Research) and the Postal Service.

The service will announce next week its mail volumes for its first quarter that ended in December.

The Postal Service plans to raise the price of sending a letter from its current 37 cents, perhaps early next year, to cover the decline in first-class mail. It would be the third rise in the stamp prices since 2001.

McKiernan acknowledged that the Postal Service would likely see a decline in mail shipments associated with the price increase but remained confident that it could retain many of the customers that have turned to it in recent months.

“If we can corral the price situation … and keep it in a reasonable area, that would bode well for us in the future,” he said.

Postal officials have expressed “disappointment” over legislation languishing in Congress that would overhaul the 230-year-old Postal Service and give it greater freedom to set its own prices.

A proposal by the post office to increase stamp prices must first be reviewed and then approved by the independent Postal Rate Commission.

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