USPS upgrades international products with alliance partners

The US Postal Service (USPS) aims to grow its international business with guaranteed products offered through the ‘Kahala Postal Group’ (KPG) of selected international postal operators, a top official told CEP-Research in an interview. Royal Mail and Spain’s Correos have just agreed to join the six-strong group.

The USPS is putting a stronger focus on its international business than in the past, and aims to target small US firms for their international express mail and deferred parcel business, Paul Vogel, managing director global business and senior vice president, said on the sidelines of this week’s World Mail & Express Logistics Middle East, Africa & South Asia conference in Dubai. He took charge of the newly-created Global Business unit in summer 2006.

“Our strength is our retail network. That is great for residents and small businesses,” he explained. But he stressed: “I do not want to steal business from FedEx and UPS. Similarly they do not want to go for residents and small businesses.”

According to the 2006 US Postal Service annual report, international mail (including packages) accounted for $1.79 billion in revenues, 792.9 million pieces of mail and 257.2 million pounds of mail. USPS had total revenues of $72.8 billion.

USPS currently offers a premium international service called “Global Express Guaranteed” in cooperation with FedEx Express for documents and merchandise up to 70 pounds with transit times of 1-3 days.

Its mid-priced “Global Express Mail” product for international documents and merchandise up to 22-70 pounds (depending on destination) is generally offered as a traditional postal Express Mail Service (EMS) to most countries worldwide.

Since 2005, however, an upgraded service with a date-certain, money-back guarantee and transit times of 3-5 days has been offered to Australia, China, Hong Kong, Japan and Korea, whose national postal operators are the other KPG members (the six posts sealed their cooperation at Kahala, Hawaii, several years ago). USPS also has several slower and lower-priced economy products for international mail and packages.

At the same time, USPS is also interested in signing individual agreements with small businesses for their international shipments, depending on their particular requirements. “I do not want a suite of business products but customer agreements,” Vogel emphasised. Such agreements would be marketed through intermediaries already providing mail services for those companies.

Britain’s Royal Mail and Spain’s Correos have just agreed to join the KPG alliance, Vogel said. The fundamental aim was to expand the alliance to other postal operators in Europe and elsewhere as they upgraded their performance standards to be able to provide guaranteed services. “ I believe most Posts can improve their service,” Vogel commented. But he added: “If a post cannot promise visibility and service, then I need an alternative.”

Although the Kahala members had a reasonably balanced flow of items, there were no plans to invest in any postal air network, Vogel stressed. USPS has a long-term agreement with FedEx for its international uplift, and uses both FedEx and UPS alongside commercial airlines within the USA.