Peak season surcharges are not new factors in logistics around this time of year, but USPS is making new challenges as the entity moves to slow down certain shipments. Hints of the slowdown first surfaced earlier this year, and the original hypotheses of effects, as noted by Forbes, indicated the slowdown would affect the midwestern states. Additional pushback to the plan was swift as the Postal Regulatory Commission slammed the move. Despite those decries against it, the actual rollout of this USPS slowdown is now here. And shippers need to understand what's actually happening, who it will affect, and why it reinforces the importance of data as king in the logistics world.
The USPS slowdown is a move to extend the typical delivery window for some shipments from 1-3 days to as many as 5 days In essence, this extends the timeline for which mail may arrive by two days, but as we all know, two days is more than enough time for someone to hop to a competitor. Of course, this change is not necessarily a sweeping variation to the movement of non-flat packages. Specifically, the USPS slowdown affects first-class letters, flat envelopes and periodicals, Alix Martichoux told KXAN.com. Such changes also are somewhat confusing in that not all USPS first-class mail may automatically take five days to arrive.
These changes to the delivery windows are going to primarily affect mail that needs to move longer distances, meaning some pieces might still arrive within 1-3 days. According to Martichoux: "Most first-class mail – an estimated 70% – will still arrive in under three days, according to anoticeby the USPS in the federal register. In general, the delays will affect pieces of mail that have to go farther, from coast to coast or far reaches of the U.S."
Furthermore, analysis conducted by The Washington Post found that "states west of the Rocky Mountains, plus Florida and Southern Texas are likely to be most affected. The Post found 70% of first-class mail sent to Nevada and 60% sent to Florida is likely to be delayed. Arizona, Montana, Oregon and Washington may see more than half of their first-class mail deliveries slow down."
Thus, the USPS slowdown will have the greatest impact on shippers moving items that fall under the affected service levels and where those shipments originate and terminate. The Washington Post developed an interactive map that allows a shipper to know the shipping day changes based on the origination of the shipment. Per the screenshot below, you can see the changes from the old plan to the new plan if shipping from Chicago:
At first glance, it seems like shippers are at the mercy of USPS. However, in reality the situation is indicative of how all carriers are implementing changes to account for the above-average demands of what's rapidly becoming a years-long peak season. UPS, FedEx and DHL already have announced peak season surcharges, and USPS has followed suit, indicating their intention to implement new peak pricing across the board:
"Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground, and Parcel Return Service. International products would be unaffected. Pending favorable review by the PRC, the temporary rates would go into effect at 12:00 a.m., Central Time, on Oct. 3, 2021, and remain in place until 12:00 a.m., Central Time, Dec. 26, 2021.
This seasonal adjustment will bring prices for the Postal Service's commercial and retail customers in line with competitive practices. No structural changes are planned as part of this limited pricing initiative."
With both a slowdown and new surcharges to consider, shippers have a singular solution: start using data to stay strategic, know actual shipping costs, and better plan shipments based on likely arrival times.
It's for these reasons that shippers have reinvigorated their supply chains with tools to help ingest, normalize, analyze and apply data. Such processes help shippers identify package anomalies before they contribute to disruptions and potential delays. They also help shippers understand their costs by zone, SKU, service level, carrier, and other granularities. Together, the insights gathered from data promotes more efficiency to help them understand their costs and when it makes more sense to choose one carrier over another. By leveraging a single, full source of truth to analyze data, shippers better understand where the carriers are underperforming, track actual delivery times by state, zip code, city, and make data-driven decisions that impact future costs and customer experience.
Take a moment to consider that final point. It's not only about knowing when to switch carriers, it's about knowing which carriers will be the best and provide the correct service level per shipment. That's where both data and outside expertise, such as the advisory services of Intelligent Audit, come into play to help shippers understand where their weaknesses lie and how to maximize efficiency across all modes and demands.
The USPS slowdown is the latest news to come out of the industry, and it most certainly will not be the last disruption to strike before the holidays are over. Regardless, it's another indicator that success in logistics depends on data-backed management, tech-driven processes, and closely monitoring the latest industry developments. By combining those realities with secure payment processing and auditing processes, shippers can finally achieve stability as delivery windows, pricing structures, and other factors continue to evolve in response to these above-average demand periods. Connect with Intelligent Audit to get started today.
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