The package shipping market boasts annual revenues in excess of $31 billion and attractive growth rates. Within this market, high-volume U.S. Postal Service shippers have traditionally relied on manifesting software, while occasional shippers have used retail and Web-based applications. Mid-range Postal Service shippers, on the other hand, have special product requirements that are not well served by manifesting or Web-based applications. Fortunately, new Postal Service-approved desktop shipping tools and third-party discount insurance are addressing the unique needs of the mid-range shipper and fundamentally reshaping the competitive position for Postal Service shipping services.
Solution Void
In the past, shipping customers had just two options: complex manifesting solutions for high-volume shippers and retail locations or Web-based applications for occasional shippers. Although these options are very successful for their intended market segments, they are not designed to support the mainstream growth segment the mid-range shipper. For U.S. Postal Service shippers to qualify for manifesting, they must ship over 200 packages each day, go through certification, submit nightly manifest reports, purchase permits, accept audits and use complex and expensive software. While these requirements are accepted by very high-volume shippers, mid-range shippers are looking for a simple and cost-effective desktop shipping application.
At the same time, mid-range shippers can frequently save on shipping costs by taking advantage of low Postal Service rates in certain mail classes and destinations. For instance, shippers can get two-to three-day delivery of lightweight packages weighing up to 13 ounces by taking advantage of low First Class mail rates. Priority Mail enjoys a price advantage for two- to three-day residential delivery of packages weighing less than three pounds, and the Postal Service offers free packaging for Priority Mail. Media Mail is an excel-lent value for ground shipping books, CDs and DVDs that are not time-sensitive. Furthermore, the Postal Service does not charge shippers any hidden fees, such as residential delivery charges, incorrect address charges, weekend delivery fees, fuel surcharges, etc. These fees, collected by some private carriers, can exceed 10% of a merchants overall shipping charges. Shippers also rely on the Postal Service to deliver packages to PO Boxes and frequently prefer the Postal Service to serve destinations in Alaska, Hawaii and the US territories.
Desktop Shipping
In order for mid-range shippers to take advantage of Postal Service package services, they need cost-effective desktop shipping tools. These tools must allow users to start shipping packages immediately so shippers can test Postal Service products quickly and easily; they must support domestic and international parcels so shippers can have a complete solution; they must print pre-paid shipping labels so package pickup can be easily arranged; they must not have any minimum or maximum package limitations; and they must integrate all services, including electronic Delivery and Signature Confirmation and parcel insurance, so users can ship all their packages without ever having to go to the Post Office. This is where the new breed of desktop shipping systems opens the door for mid-range shippers to take advantage of Postal Service offerings.
The new breed of desktop shipping systems, such as Endicia Internet Postage (www.endicia.com), integrate Postal Service · shipping APIs to provide electronic Delivery and Signature Confirmation, electronic Express Mail and Global Express Mail labels, electronic customs forms and the International Mail advisor. They use PC Postage to pre-pay shipping labels and integrated insurance to complete the solution. Endicia uses award-winning software to design and print prepaid postage shipping labels for all Postal Service shipping classes (see Figure 1). Domestic shipping labels are all printed with verified and standardized destination addresses, and users can customize their shipping labels with logos, graphics and text. Users can also print shipping labels with the postage amounts hidden (Postage-Paid or Stealth Indicia).
Desktop shipping solutions should not be confused with simple PC Postage applications. Desktop shipping solutions offer complete electronic shipment management with advanced features for professional shippers. For example, consider some of Endicias features:
The Postage Log (see Figure 2) maintains all postage purchases and shipments including all package information. Customers can search for, obtain the latest tracking or delivery information or print a receipt for their shipments. The log can be printed or exported to other applications for a user-selected period of time.
Postage spending statements include options for detailed listings of all shipments, summaries of spending, mail class tables and charts and delivery statistics for the individual mail classes used by the shipper.
Shipment notification sends an e-mail to the package recipient announcing the shipment, the date of shipping, the destination address, the mail class and a Web-link to the latest status of the shipment. The advantage of this feature is that Postal Service customers can proactively inform their own customers that orders have shipped and avoid the customer support cost of fielding calls about shipments.
The International Mail advisor displays mail classes, rates, prohibitions, restrictions, observations, required customs forms and areas served for the destination country and package weight. Because international rates and regulations change far more frequently than domestic, this information is retrieved in real-time from the Postal Service to use the most up-to-date data.
Parcel Insurance
Shippers will typically insure high-value products or offer their customers insurance for an extra charge. There are two Postal Service-approved options for insurance: Postal Service Insured Mail and U-PIC discount parcel insurance (www.u-pic.com). U-PIC offers a Postal Service-approved alternative, which not only avoids this requirement but also saves customers up to 80% on their insurance premiums. U-PIC insurance is fully integrated into Endicia Internet Postage so users only have to enter a declared value for the shipments they wish to insure.
U-PIC, underwritten by Indemnity, division of Ace, is the only insurance company that is an approved partner of the Postal Service. Shippers can take advantage of U-PIC to save money on their insurance premiums and avoid a trip to the Post Office. Customers who combine U-PIC insurance with Delivery or Signature Confirmation reduce their insurance rates by up to 80%. U-PIC also receives high praise for its prompt claims payment. After the customary 30-day waiting period from the date of shipment, U-PIC guarantees all Postal Service claims are paid within seven to 10 working days. International insurance is available and U-PIC insures any Postal Service shipping method. U-PIC provides shippers with a simple way to reduce their shipping expenses, and there are no start-up fees or monthly fees. Packages insured with U-PIC do not need to be presented to a retail clerk, so they can be deposited in a mailbox or handed to a mail carrier. U-PIC also provides online parcel insurance for buyers and sellers who wish to have the occasional package insured directly. Because insurance is not a core-product for the Postal Service, third-party insurance, such as U-PIC, enhances the shipping services the Postal Service provides and bolsters its competitive position another key to growing Postal Service revenue.
Everybody Win
By taking advantage of attractive Postal Service rates, residential delivery, carrier pickup and private insurance, mid-range shippers reduce their shipping costs. By taking advantage of the new breed of shipping tools, mid-range customers streamline their shipping operations and improve their bottom line. By driving adoption of desktop shipping, the Postal Service controls costs because it keeps shippers out of expensive retail lobbies. By driving revenue growth in packages, the Postal Service manages price because it covers more of its fixed costs. Most importantly, by promoting desktop shipping, the Postal Service enhances service for the customer.
Steve Rifai is director, Marketing, and U.S. Postal Service Liaison at Envelope Manager Software. For more information, visit www.endicia.com or call 800-576-3279 x140. Candi Booth is vice president at Universal Parcel Insurance Coverage. Contact her at 800-955-4623 or visit www.u-pic.com.
