The U.S. Postal Service has a lot more work ahead if it wants to become a serious rival to United Parcel Service in the residential parcel shipping market. That was the consensus of a 10-member focus group of catalog marketers gathered by the USPS on June 2 during the Annual Catalog Conference in Boston.
The group, which knew from the outset that the two-hour session was being conducted by the USPS, was blunt in its criticism of the agency. A majority of the participants currently use UPS for most of their parcel shipments, although more than half of them also use the Postal Service for some deliveries.
Most respondents were considerably kinder in their assessment of UPS’s and Federal Express’s service levels than they were of the USPS’s (see chart). In a simple show of hands, most participants rated the private carriers’ parcel delivery service well above that of the USPS, citing the private carriers’ predictable delivery times, while criticizing both carriers for their higher costs.
Yet most said they feel that UPS is intentionally pricing itself out of the residential package delivery business. “UPS is giving the Postal Service a wonderful opportunity to gain a huge share of the consumer catalog market,” said a member of the group. “Now the USPS has to pull its service up by not just coming up to FedEx’s and UPS’s service levels, but by bending over backward to gain our confidence.”
The USPS’s image is a major problem, panelists agreed. For instance, despite the focus group members’ general satisfaction with the agency’s parcel delivery service during last year’s UPS strike, a number did say that their customers still hold the USPS in low esteem. With that in mind, several group members noted that the USPS’s two- to three-day non-guaranteed delivery window for Priority Mail just might not be enough. “A lot of customers want to know exactly when their packages are going to arrive,” a participant said. “And guaranteeing delivery time is critical.”
And although they said Priority Mail service has largely been dependable, some said the USPS has had difficulty handling and processing different-shape pieces at varying weights.
Panel members also called for improved service for parcel insurance sold by the USPS, complaining that collecting on claims is practically impossible. “Postal insurance is very expensive, and it’s very hard to collect, as opposed to UPS, which insures the first $100 worth for free,” said a group member. “So we don’t insure any packages we ship via the Postal Service with values of less than $250. Over $250, we don’t use USPS at all.”
Perhaps even more striking, however, many of the participants said that the agency’s promised deployment of a delivery confirmation system for Priority Mail next year may not be enough to sway them away from UPS.
Delivery confirmation, which several group members were unfamiliar with, only verifies (via a postal carrier’s hand-held scanner) that package deliveries have been made. Once the group leader explained the system, many participants said they were unsure they’d want to give up the tracking and tracing systems offered by both UPS and Federal Express. Most said they not only want the kind of track and trace systems employed by UPS and FedEx, but they also want the ability to access such information online.
“That shows we haven’t committed ourselves to [delivery confirmation] very well,” said George Hurst, manager of mail order sales for the USPS’s tactical marketing and sales development group, after viewing the session along with other USPS officials and Catalog Age Senior News Writer Paul Miller. “It was interesting that many of them didn’t know about delivery confirmation; maybe we need to advertise more to catalogers.”