'USPS in search of bigger slice'

Armed with a new structure to tackle the international market, the US Postal Service aims to get a bigger slice through co-operation rather than acquisitions. Last year, the USPS handled over 793 million pieces of international mail, which translated into USD 1.9 billion in revenues.

To lay the foundations of the international expansion drive, Paul Vogel, who was appointed managing director of international business and senior vice-president of the USPS last summer, has restructured the postal agency's international activities, consolidating the separate elements into one global business unit.

The new organisation, which was recently unveiled, consists of five divisions. Besides the operations and global business management groups (the latter covers sales and account management), there are units for global finance and business analysis, global network strategy and technologies, and international postal services/partners (which manages international relations and Customs and liaises with the Universal Postal Union).

Yvonne Yoerger, a spokesperson for the USPS, said that the various elements existed previously, but they are now brought together under one umbrella to form a full, self-sustaining profit centre.

Besides building a new organisation, Vogel's focus in the first year of his tenure has been on consultations with customers to form a better understanding of their needs. This has led to a strong emphasis on flexibility and the development of services tailored to individual requirements.

"We're looking at becoming more accommodating to the individual commercial customer's needs and going into contracts for products and services that will make them more successful. That's the type of feedback we're getting from our customers," Vogel said.

Yoerger pointed to USPS's Global Shipping Solution, a programme developed for Internet fashion retailer eFashionSolutions last autumn. This allows the retailer to manage shipments electronically, including pre-payment of duties, automated Customs declaration preparation and international customised mailing forms. The customer can create on-line Customs forms, print labels and track packages door-to-door.

"We're also looking at future co-branding of products," Vogel said. "We already have one co-branded product with FedEx, Global Express Guaranteed."

Other postal agencies have steered clear of the integrated express carriers, whom they regard as major competitors. In Yoerger's eyes, the likes of FedEx and UPS are competitors as well as customers and service providers.

"The integrators are a big customer base for us, and a big supplier base. Why not look at the synergies that the integrators can bring to the table and meld them together?" Vogel asked.

In the domestic arena, the USPS also has closer links with the integrators. Last year, it awarded a USD 100 million contract to UPS to provide domestic transportation for First Class mail and Priority Mail from 98 US cities. It also signed a deal with FedEx worth an estimated USDD 1 billion a year under which the integrator carries Priority and Express Mail through 2013 – the largest chunk of postal business handled by any air carrier in the US.

This collaborative approach sets the USPS apart from Deutsche Post's logistics strategy. "We don't want to be a Deutsche Post and acquire our business through mergers and acquisitions," Yoerger said. The USPS has no intention of acquiring assets and infrastructure to provide logistics services to customers, she added.

Besides co-operation with the integrators, the USPS is also looking to work together with other postal agencies. Vogel sees room for growth in a number of markets, such as Eastern Europe and Latin America, but he is most bullish about Asia.

"The whole of Asia is probably the most attractive of markets. We've been working with the Asian community for over four years now," he said. "There's nothing but opportunity there; pure, 100 percent opportunity."

In terms of partnering with Asian postal agencies, the new USPS managing director sees a host of opportunities, ranging from helping postal authorities in less developed economies with infrastructure development and providing and exchanging advice and counsel to joint development of services.

For these undertakings, the USPS can draw on a host of existing relationships to build on. "We have a lot of co-operative ventures in the Asia-Pacific region," Yoerger said.