Package Volumes
A record number of packages leading into the winter holidays appears to be the driving force behind USPS’ gridlock. Postmaster General Louis DeJoy recently said that package volumes could be up as much as a third compared with 2019. Since venturing out to brick-and-mortar stores is becoming increasingly risky with the exploding number of coronavirus cases, consumers are relying more on e-commerce to do their holiday shopping, which is putting a strain on the postal system.
Paul Steidler, a senior fellow at the Lexington Institute who studies logistics and energy, told me that USPS is much better at scaling up to handle a huge influx of paper mail—say, a boom in election mail—compared with packages. “Delivering packages is a harder and inherently more costly business for the Postal Service. Mail goes to nearly every address and is compact. You can have tens of thousands of dollars’ worth of Postal Service revenue in a single small truck,” he said. “Packages are bulkier, do not go to every address, and require several trips back to a post office on a typical given day.” At times, carriers will have to pause their routes to go back to the station and pick up additional mail and packages, which adds time to their shifts.
FedEx and UPS
Private delivery companies rely on USPS for last-mile shipping, to reach rural areas, and, in a way, to pick up the slack when they become overloaded. The Washington Post reports that FedEx and UPS have been cutting off new deliveries for certain retailers due to the sheer glut of packages. Customers who’ve been abandoned by these private shippers are turning to USPS, which can’t reject delivery orders. “The Postal Service is the wonderful public entity that takes everybody’s mail, has to take everybody’s mail, should take everybody’s mail, so there is no safety valve there,” said Mark Dimondstein, president of the American Postal Workers Union.
Wally Nowinski, chief marketing officer at the user-customized products company Collage.com, has been experiencing huge headaches using private carriers this year. November and December typically account for more than half the company’s business for the entire year, much of which is conducted through the mail system. Demand for products from Collage.com, like blankets and mugs with pictures printed on them, are up 50 to 100 percent compared with the last holiday season. At the same time, though, shipping times are lengthening. “The most disruptive thing we’ve seen is UPS, with no notice, in random emails, canceling pickups … and leaving pallets of products that customers have ordered stranded on the dock,” Nowinski said. He says he sees the most holdups for his company’s packages at the stage in the journey when UPS is supposed to hand them off to USPS for last-mile shipping. Collage.com has seen 30 percent of orders through UPS’ ground service and 52 percent of orders through USPS take longer than usual based on historical data. And 84 percent of orders that the company sends through UPS Mail Innovations, a joint service between UPS and USPS, have been experiencing delays.