Taking cues from global express integrated carriers, the U.S. Postal Service is beefing up its international service offerings of late. The USPS has recently simplified its Global Delivery Services product line to the retail and commercial shipper. The tagline �Simple Choices� says it best of the Postal Service�s recent revamp. The makeover includes enhancements to its Global Express Guaranteed service for date-certain delivery to destinations in more than 200 countries.
Jim Wade, vice president of International Business at the USPS, says recent changes to USPS Global Delivery Services make choosing the Postal Service more attractive to the shipper from the cost and service perspective. The USPS views both the international express and international deferred letter and package market as ripe for development. Currently, only about three percent of USPS corporate revenues � at about $65 billion last year � are tied to international markets. New service offerings will allow the USPS to grow its share of the global letter and package market.
Wade says the proliferation of the Internet, e-mail and the electronic transfer of files obviously discourages meaningful growth in the international letter/document shipping market. Yet, Wade is clear about the continued growth in international packages, particularly in the 70-pound-or-less category, and the USPS� plan to claim a bigger stake of this US import/export package market, valued at almost $9 billion annually. �The growth is here. On the export side, the less-than-70 pound shipment market is a $5 billion market, growing about five percent a year now,� Wade explains. Similarly, the import market for packages into the United States in the less-than-70 pound category is about a $4 billion market with similar per annum growth.
Two-, Four- and Six-Day Segmentation
The overhaul to the Global Delivery Services product line was launched more than one year ago. Robert Michelson, manager of International Marketing at the USPS, comments �We�ve changed our classification structure from one based on content to one based on speed.� Michelson notes that in the four-pound-or-less category alone, the USPS recently reduced its offerings from 12 to five. Fast, faster and fastest as well as Simple Choices characterize the two-day, four-day and six-day service offerings.
For the consumer or retail shipper, this means that letters and parcels under the Global Express Guaranteed premium service reach the destination guaranteed within two to four days. Global Express Mail assures delivery within three to five days, while Global Priority Mail takes four to six days and is offered on low weight (under four pounds) to 53 countries. Global Air Mail for letter and parcel post services remains to some 200 countries as does economy or surface mail.
For the commercial shipper, in addition to the Express and Priority services offered to the retail customer as described above, international shippers can select surface mail, bulk mail services and Global Direct. Global Direct is direct entry mail that looks like it was shipped within the destination country. For example, a US-based direct shipper can target customers in Canada using the Canadian Post for delivery, and the item will appear to be shipped from Canada.
For bulk international air mail, the USPS works with more than two dozen US-based mailing and shipping consolidators as Postal Qualified Wholesalers (PQW) to consolidate international mail so shippers receive discounts off bulk mail rates and ensure their shipments are properly prepared. These PQWs tend to be large, nationally known mail and package consolidators.
Global Express Guaranteed Expands
Global Express Guaranteed was originally launched by USPS in partnership with DHL in April 1999 and started with 10 US markets and 20 European destinations. Michelson says USPS� relationship with DHL continues to go well and this is reflected in its recent service enhancements. Global Express Guaranteed expanded during 2000 to more than 200 international markets from 35 US cites. Additionally, in fall of 2000, the service was expanded to encompass packages.
Improving Package Services
As for Global Express Mail, which normally takes about four to six days depending on the destination, Wade stresses that USPS research found demand for faster, more reliable deferred services � an alternative to premium express services. �There are a lot of people in the $5 billion export package market that are buying express services that don�t need it,� he says.
The general shipping public knows the USPS is usually always less expensive to ship with but cannot typically offer all the guarantees and reliability of its premium-priced counterparts. Also, the seasoned international exporter might realize the USPS cannot offer the integrated services of the premium express carrier because it doesn�t operate its own fleet of aircraft or tightly controlled systems network to generate a two-day international service, for example. However, this environment is already changing as the Postal Service moves forward with its service partners globally, which include some 190 foreign postal authorities.
�If we can increase our service quality to play a better game of all-around performance, we have an ability to unify the postal world on a deferred package service that would be very competitive,� Wade explains. Of course, hands down the USPS has competitors beat on pricing. Wade says it is a matter of improving service quality in its own system as well as among its global service partners. To that end, the USPS is actively involved with other postal administrations around the world to ensure improvements to global shipping delivery processes.
Other incentives are also in progress at the USPS that will render international shipping with USPS more attractive to the shipper. The USPS has reduced its thresholds on international discounts for commercial shippers of parcels by utilizing International Customized Mailing (ICM) agreements. The Postal Service will garner more small- to medium-sized international package shippers as it dramatically reduces minimums to qualify for volume discounts from $2 million or one million pounds annually to $12,000 or 600 parcels of annual volumes. For letters, documents and printed matter, the USPS has kept the minimum required for customers to receive customized prices and services.
Michelson notes that the Postal Service takes the paperwork out of international shipping through its proprietary service called Customs Preadvisory System (CPAS) � a customs preadvisory and labeling service, which is used by international shippers to select countries.
Wade says another way the USPS will easily grow its base of commercial international accounts is through its legions of managed domestic shipper accounts in the United States, currently some 15,000 strong. �Internationally, many of these customers are using competitors such as DHL and FedEx for their shipping needs. Our plan is to offer express and deferred end-to-end service performance in both directions � import and export � through our global service partners at excellent prices,� he says.
For more information about the suite of global services offered by the USPS, please visitwww.usps.com.
