ShipMatrix, a provider of software and services for parcel shippers, has created a new offering that aims to address the massive problem of major carrier capacity this holiday season by making it more attractive for shippers to use the U.S. Postal Service for lightweight items.
Under the program, called First Class Parcel Service, shippers using either USPS First Class or Priority Mail get the added benefit of enhanced tracking and notification for their customers, as well as service guarantees, per-ounce pricing and elimination of various surcharges. USPS visibility and tracking for ecommerce shippers have been cited by experts as a weak area for the government agency.
The only surcharge from ShipMatrix is the 40 cent per package seasonal one imposed by the USPS which ends Dec. 27. FedEx and UPS surcharges can hit $5 per package for the largest shippers this year. The program is a premium to what a shipper would pay by independently contracting with USPS.
Both FedEx and UPS have suspended service guarantees due to the unusual crush of packages as ecommerce has soared this year. ShipMatrix will monitor USPS performance and automatically issue a credit for any parcels delivered in more than five days.
ShipMatrix will provide information on late shipments, as well as end customer notifications, providing more visibility and predictability.
ShipMatrix founder and CEO Satish Jindel said the focus is on items that fit into a mailbox, as he believes it’s inefficient for USPS carriers to handle larger items that require a driver to leave the truck and go up to a door.
Jindel said the service was not in competition with FedEx and UPS, but rather a way to address the massive gap between ecommerce shipping demand and carrier capacity this peak holiday season. ShipMatrix estimates that gap is 7.2 million packages per day in 2020 based on its massive shipment tracking data.
“We’ve never had this level of a gap before, because carriers are handling packages that aren’t the most efficient for them,” he said. “Because of that, we need to put the right package in the right network, so the industry can handle that shortfall without delays.”
ShipMatrix will also be able to advise shippers on dividing up and distributing volume among carriers. For instance, if a shipper is at 12,000 parcels per day and 2,000 of them fall into the size and weight sweet spot for USPS, the software helps them route those items to the less expensive USPS option.