USPS unveils plan for 7-day a week holiday season package delivery

In an effort to meet anticipated holiday season demand in the form of double-digit volume growth, the United States Postal Service (USPS) last week said that it plans to deliver packages seven days per week in major cities and volume areas, effective November 17 through Christmas Day, December 25.

USPS officials said that the demand for package service continues to grow, with online retailers shipping more products to customers, creating the need for Sunday package delivery during the holiday season to prepare for the anticipated heavy shipping activity.

“The Postal Service will be out making deliveries every single day during the holiday season, including Christmas Day,” said Postmaster General Patrick Donahoe in a statement. “During the holidays, no carrier makes more deliveries to more places than the Postal Service, and this year, we’re raising the bar with enhanced tracking and Sunday delivery. Every household in America relies on us to get their packages in time for the holidays, and we take great pride in taking on that responsibility. We’re prepared to do whatever it takes to deliver for our customers.”

In terms of anticipated volume growth during the holiday season, the USPS expects double-digit growth for its package business that it expects to be in the 450 million-to-470 million package range, which would represent a 12 percent annual improvement.

USPS’s main competitors, the duopoly of UPS and FedEx, also both expect increased business activity during the holiday season.

FedEx said last month that it FedEx says it expects to move more than 290 million shipments between Black Friday and Christmas Eve, which would mark an 8.8 percent annual gain over the same period from a year ago. FedEx expects December 15 to be the busiest day in its history, with the company expecting to move 22.6 global shipments, which would nearly double the 11.5 million shipments it moved on December 17, 2007.

And UPS said it expects December shipments to be up 11 percent annually, with the company previously stating it has invested $175 million in operating expense and $500 million on capital expenditures to enhance its capabilities and prepare its network for Peak Season and future related volume growth.

“While 7-day a week delivery between Thanksgiving and Christmas certainly is an advantage over the private carriers that offer five day a week delivery, the Postal Service really has no choice,” explained Rob Martinez, president & CEO, Shipware Systems Corp, a San Diego-based parcel consultancy. “Without the additional delivery days, it would almost certainly fall behind. Once you do, it’s very difficult to catch back up. Saturday and Sunday deliveries were a very important part of their package delivery strategy last December.”

With the incredible growth of parcel select services, new lower Priority Mail pricing, and shippers looking for alternative delivery options, the Postal Service will be extremely busy this holiday season, he said adding that he predicts it will handle well over half a billion packages this holiday season. 

“I just hope that it is prepared to handle those volumes in order to avoid a public relations fiasco,” he concluded.

Jerry Hempstead, president of Orland, Fla.-based parcel consultancy Hempstead Consulting, said that the USPS is expecting a lot of holiday-related activity with Amazon, which he believes is the leading force behind its growth forecast, which, in turn, makes 7-day a week package delivery logical and worthwhile, because otherwise packages will back up significantly and tarnish the organization’s reputation.

“A lot of these transactions for Sunday delivery are ones that are going to be tendered to the USPS at the DDU (destination delivery unit) level by both FedEx and UPS, as well as Amazon,” said Hempstead. “The intent is to operate the network and a lot of the volume they will deliver on a Sunday is actually bypassing the entire USPS network, with the USPS just providing last-mile delivery at the DDU level.”

The USPS announcement, he said, is not terribly surprising, as the USPS has provided similar service for Amazon in the past, although it was not delivering Express Mail on Sunday, with the major difference being that this development represents much more volume than the Express Mail business.

“What is going to happen is it will create a more rational flow of transactions certainly at the DDU level, because if they don’t do it they are going to have a lot of packages getting jammed up and delayed,” said Hempstead.