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© 2012 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar
sessions and sound recordings of seminar sessions. All rights reserved.
Welcome to Session 127
Sponsored by: Presented by:
Gary C Reblin
Vice President
Domestic Products
U.S. Postal Service
B2C Shipping Means
Lightweight, Regional Choices
2
Headline News
USPS Financial Crisis!
Post Offices Closing!
USPS Considers 5-Day Delivery!22
Generation Y Doesn’t Mail!
Texting, email, social media!
Future of USPS in Jeopardy!
3
The reports of my death have
been greatly exaggerated.
―Mark Twain
4
USPS Mailing and Shipping Performance
Source: RPW
-2.0%
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
First Class
Marketing
Mail Shipping Services
Special & Ancillary Services
International
Total
SPLY Var. %
Not All Bad News!
FY 2011 Year-End Revenue to SPLY (%)
5
The Postal Service is:
• Changing and adapting to a digital world
• Promoting
innovation
• Making B2C
shipping easier
Good News!
6
First-Class Mail
Marketing Mail
Shipping Services
1. Slow diversion by adding value to hard copy to differentiate it from digital
2. Embracing new
opportunities
from digital and
social media
1. Simplify the use of Marketing Mail
2. Enhance its value with emerging technologies
1. Develop solutions to target the B2C shipping needs of the growing eCommerce market
Shape the Future
USPS Strategies
7
U.S. eCommerce Trend
$-
$50
$100
$150
$200
2000
2002
2004
2006
2008
2010
CAGR:
19%
• eCommerce sales up 19% per year since 2000!
• Total retail growth averaging 2% over same period
• Continued expansion―ecommerce is now only 4.4% of
total U.S. retail sales
U.S. Census data
U.S. Retail eCommerce Sales ($ billions)
2001 through 2010
8
Mobile eCommerce Trends
• This past holiday season, twice as many people as
last year said they were willing to make a purchase
using a mobile phone (62% vs. 32%) Source: Sybase Inc. poll of 847 mobile phone owners
• 90 million people―more than one-third of all
internet users―will use a tablet device by 2014 Source: eMarketer forecast
9
Mobile’s Impact
“We have always capped
e-commerce at 10 to 15 percent
of total retail sales, but this [tablets and
mobile devices] potentially has the
capability of really expanding
e-commerce much beyond that.”
–Forrester e-commerce analyst Sucharita Mulpuru
10
USPS B2C Focus
Competing for volume based on:
• Parcel size
• Distance
• Price
11
Free Is The New Price
ComScore
• Free shipping has become a major decision factor
for e-commerce consumers
• Nearly 3/4 (73%) of shippers consider free shipping
“somewhat important” or “very important” when
making holiday purchases.
73%
comScore data
12
• Lightweight advantage
– Small is growing (ex: electronics)
– Fits easily in mailbox
– Meets USPS strategic
last-mile advantage
– Flat Rate, Regional Rate
and Cubic Pricing
• Regional trends
Characteristics of B2C Shipping
13
0
5
10
15
20
25
30
35
40
45
50
FY2010 FY 2011
Mill
ion
s
0-1 LBS
2-5 LBS
>5 LBS35%
61%
4%
33%
63%
3%
Package Volume by Weight
USPS Priority Mail Commercial Plus
Package Volume*, FY2010 & FY2011
*Weight/zone products only; does not include Priority Mail Flat Rate Boxes and Envelopes
14
U.S. Domestic Shipping < 70 lbs by Length of Haul (%)
16%17%
11%
5% 3% 6%
42%
0
10
20
30
40
50
Local-Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
Average B2C Length of Haul
58% of shipping volume in Zones 1-3
15
New Products New Product Volume
FY2011 Year End
-
1
2
3
4
5
6
Jan Feb Mar Apr May Jun Jul Aug Sep
Mil
lio
ns
Priority Mail Padded
Flat Rate Envelope
Priority Mail Flat Rate
Legal Envelope
Regional Rate Boxes
16
B2C Ground
PRODUCT WEIGHT FEATURES
First-Class Package
Service
0 to 1 lb • Commercial Base up to 13 oz
• Commercial Plus up to 16 oz
parcels w/ 5,000 pc threshold
Regional Ground
Service
0 to 5 lbs • Zones 1-3 only*
• Annual threshold 10,000 pc
Parcel Select Up to 70 lbs • Last mile/first mile returns
• Partnerships (see usps.com)
*2012 pending
17
B2C Expedited
PRODUCT WEIGHT FEATURES
Priority Mail 0 to 70 lb • Flat Rate options
• Volume pricing
Priority Mail Regional
Rate Box
Up to 15 lbs―Box A
Up to 20 lbs―Box B
Up to 25 lbs―Box C*
• DelCon included
• Free package pickup;
forwarding & return
Priority Mail
Commercial Plus
Cubic
• Soft packs and
padded envelopes
• 150,000 threshold*
Express Mail • New Flat Rate Box*
• 2 Flat Rate Envelopes
• Volume pricing
*2012 pending
18
Returns
• Costly to ecommerce merchants
– 2-3 times cost of outbound shipment
– If poorly handled, erode profits
– Impact on repeat orders, customer loyalty
• Effective returns strategies
– Free or inexpensive shipping
– Customer convenience (pickup,
drop-off, prepaid labels)
– Credit issued promptly based on
data
19
New Cloud-Hosted Tool for
Label Printing and Distribution
• Consumer able to print
label via merchant
website
• Merchant call center agent able to email label to consumer
New Solutions for Returns New Solutions for Returns
20
New Scan-based Payment with Flat Rates
• Scans in USPS network trigger payment
• Customer given flat rate; validated via sampling
• Eliminates manual rating
New Solutions for Returns New Solutions for Returns
21
Package Visibility
• 2010 average 5 scans
• 2011 average 6.5 scans per piece
• Barcodes on 73% of packages
2011 Scan Events
• Delivered
• Out for Delivery
• Sorting Complete
• Arrival at Unit
• Processed
• Depart Sort Facility
• Arrive Sort Facility
• Shipment Accepted
• Electronic Shipping
info received
22
Android™ & BlackBerry™
• Track a package
• Find Post Offices and collection boxes
• Look up a ZIP Code
• Carrier Pickup™
iPhone 3.0 Release
• Order free shipping supplies
• Schedule next day pickup
• Barcode scanning
• Online prices
USPS.com Mobile Access
23
On Board―2012
• Priority Mail Regional Rate Box C
• First-Class Package Service
• Express Mail Flat Rate Box
• Cubic Soft-Pack and Padded Envelope
24
Questions?
© 2012 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar
sessions and sound recordings of seminar sessions. All rights reserved.
For More Information:
Gary C. Reblin
Vice President, Domestic Products
U.S. Postal Service
www.usps.gov
Visit MODEX 2012 Booth 2515