Not surprisingly it happened with little fanfare. On January 1st 2015; the big boys in domestic small parcel shipping ushered in a new dimensional weight formula to get their yearly price bump. UPS® and FEDEX® announced that their new calculators were to come into effect on the same day. Under the auspices of more efficient packaging requirements to minimize wasted volume, it meant, for companies shipping shoes for example, a net rate increase in excess of 20%. If this were to have happened in Europe, there would be a massive anti-trust suit going on right now. Somehow or other though, UPS® and FEDEX® got away with it. Either that or maybe, just maybe, someone in the government figured out they’d messed up, and in the interests of the Post Office, kept schtum.
For years UPS® and FEDEX® cited the increase in the price of oil - tagged as “fuel surcharges” - to justify systematic rate hikes. Rates always went up when there was an oil shortage but never down when there was a glut. With the price of oil falling drastically in the last quarter of 2014 it meant a new rationale was required to bump the bottom line and boost shareholder dividends. Nobody can prove that the big two were in cahoots, but both companies got on board with the new dimensional weight denominator at about the same time. All this as the price of oil tumbled to less than half of where it was months before the new dim weight calculator came into effect.
Whether intentionally or unintentionally, the Post Office didn’t collude, and it may prove to be the best non-decision the PMG has made in years.
For years, mail volume has been sliding downhill fast as email became instant gratification for communicating the written word. People stopped mailing letters. Bills were sent and paid electronically. The post office bumped up the price of a mailing a letter by more than 50% in a matter of just a few years in what seemed like a futile attempt to make a budget work. Post offices closed. Rural carrier routes were consolidated. Some Post Offices shortened their hours. The powers that be, even flirted with the idea of suspending Saturday deliveries as a solution to help mitigate the cost of pre-funding pension accounts. National postal services around the globe are facing the same challenges. What they’ve all realized is that what they can do is leverage their “final mile” distribution channel to compete with the big boys for parcel post. Ironically, because of those same budget constraints, the Post Office marketing department has been unable to adequately advertise the fact that if you want to ship a parcel, invariably it’s cheaper to ship it through the USPS complete with tracking and proof of delivery. Yep, your Postie now carries a diad. But small businesses know, and thousands have made the switch to the post office, Amazon can attest to that.
So if you ship shoes for a living, or for that matter have shoes shipped to you for a living, it all comes down to the same thing. UPS and FEDEX are disproportionally too expensive to ship shoes (especially lightweight shoes of the Pedors variety) unless of course you have threatened “a walk to the post office” or blackmailed your rep into giving you a significantly discounted “negotiated” rate.
Of course while we applaud and support our Postal Parcel Carriers, the boys and girls in brown still have the upper hand in business parcel delivery, especially when you need a delivery by a certain time of the day. To that end, we’ve introduced the Pedors 247 Guaranteed Set Shipping Rate Schedule to match the post office rates our customers would ordinarily benefit from if the postal service were able to offer a comparable guaranteed time delivery service. They are not there yet, but my guess is that come Christmas, if not this year then certainly by December 2016, Santa’s helpers will be wearing blue and not brown.