Delivering Your Products To Customers In USA – by United States Postal Service at eTailing India Expo'17

U.S. Postal Service Global Business

Delivering Your Products in the USAFebruary 9, 2017

U.S. Postal Service Global Business2

Did You Know?..........

• Quasi-government • No funding from the Government

• Profit oriented

• USPS delivers more last mile eCommerce residential deliveries than any other delivery company in the US

• COOPETITION is good for the market

• Facilitators of competitive shipping options for domestic and offshore b to c shippers through IT enabled solutions• Work share means savings

• Higher zones vs. lower zones

• USPS handles 46% of the world’s mail

•


Why The USPS is used for Package DeliveryExamples of key reasons

• USPS has the largest shipping delivery network in the U.S.

Provides final U.S. delivery for many other carriers

Over 4.8 billion packages delivered in 2016 by USPS

Largest retail acceptance footprint in the U.S.

Trusted brand and security

Access to household mailboxes and front door

Upfront pricing with no hidden surcharges

Competitive tracking and delivery performance


The U.S. Demand For Goods AbroadSummary of findings

Source: The Colography Group, Inc. Air and Ground by Weight ©2016 CGI all rights reserved.

Continued improvement hangs precariously on consumer willingness and ability to spend more.

U.S. online purchases from foreign websites continue to increase at a faster rate than all other imports.

48% of U.S. inbound volume weighs 2-20lbs.

51% of items into the U.S. are routed using multiple carriers to keep the costs low and transit commitments favorable.

Unless economic indicators change course significantly during 2017, near-term U.S. demand will continue.


Products U.S. Consumers Buy From Cross-border Websites

Source: Google and TNS, “Consumer Barometer,” June 2015.Note: n = 1,383 who ever purchased a product/service from a foreign ecommerce site.

Product Categories Percent Of RespondentsClothing and accessories 31%Books CDs, DVDs, video games 22%Computer hardware, software or peripherals 16%Toys 15%Cosmetics, beauty or health products 14%Home furnishings and household goods 11%Food (items, specialty) 9%Gifts, etc. 9%Digital cameras/camcorders, audio devices 8%Mobile phones, SIM cars 8%Car parts/accessories 7%Tools and garden equipment 7%Drinks (alcoholic and nonalcoholic) 6%Domestic appliances 6%Sports equipment 6%Cars 4%Other 13%


49%

43%

35%

20%

11%

10%

The price is better internationally

The brands or products I like are not available in the US

Want something unique not found in US stores

The quality is better

Like the status with shopping internationally

Want products found while traveling or living abroad

Source: Google and TNS, “Consumer Barometer,” June 2015.Note: n = 3,217 who ever purchased a product/service from a foreign ecommerce site.

Reasons U.S. Consumers Buy From Cross-border Websites


Importance of Options When Checking Out Online

Free shipping options

Percent of Respondents for Whom Online Checkout Options Are Important

Source: Secondary empirical researchNote: Respondents may choose more than one option. N=5,849

35%

43%

31%

51%

37%

51%

63%

62%

50%

54%

81%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Having a variety of payment options in addition to a credit card

Order history, so I can see everything I’ve bought

Estimated or guaranteed delivery date

Provide estimated delivery date and shipping costs early in the process

A login so the site can remember my purchasing preferences (e.g., credit card number)

Ability to select delivery location that is convenient to me

Remember me so I don’t have to refill my shopping cart or rekey information if I already started an order

Show me other items I might be interested in

Flat rate shipping options

Expedited shipping options so I can get my purchase faster

7


Reasons for Abandoning Online Shopping Cart

25%

24%

50%

58%

57%

0% 10% 20% 30% 40% 50% 60% 70%

I was not ready to purchase, but wanted to get an idea of total cost with delivery

Shipping costs made the total purchase cost more than expected

My order value wasn’t large enough to qualify for free shipping

I wanted to complete the purchase, but got distracted and forgot

My preferred payment option was not offered

Percent of Respondents That Agreed With Reason for Abandoning Shopping Carts

N = 5,241

Source: Secondary empirical researchNote: Respondents may choose more than one option. N=5,849

8


Consumer Willingness to Wait for ShippingPercent of Respondents by Number of Days Willing to Wait

3%

6% 6%

25%

32%

18%

10%

0%

5%

10%

15%

20%

25%

30%

35%

2 days 3 days 4 days 5 days 6-7 days 8-10 days 11+ days

Source: Secondary empirical research N=5,8529


U.S. Consumer Preference in Delivery LocationPercent of Respondents by Preferred Delivery Location

Source: Secondary empirical research N=5,852

74%

5% 5% 4%3% 2% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

My Home/Residence

My Workplace Friend or Family Member

Another Authorized Pickup Location

Another Retail Location

Delivery Locker Retailer's Store

10


Who is the Preferred Package Delivery Carrier in the U.S.

7.1%6.4%

4.0%

8.6%7.7%

8.6%

6.2%7.2%

11.6%

14.8%

13.1%

15.2%

16.3%

13.2%14.5%

14.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

FY-2015 FY-2016

Total Market

U.S. Package Delivery Carrier Trends (Volume Growth)

Source: The Colography Group’, Inc. ©2016 CGI all rights reserved.


Shipping services offered in the marketplace

Economy Solutions• Lightweight packets and Air Parcels• Lower value goods• Limited tracking• 8-15 day transit

Expedited Solutions• Moderately priced goods• Additional tracking • 3-8 day delivery speed

Express Solutions• High value merchandise• Full tracking • 2-4 day transit times

Higher

ServiceFasterSlower

Lower

Price


Two Methods to Send Multiple Packages to the U.S.

One-to-One Shipments One-to-Many Shipments

x x

Steady (5-8 days)Faster (1-4 days)

EconomicalExpensive

Transit

Price

13


Cost of Single-Piece Pricing

14

Worldwide Expedited

Origin: Mumbai, India (400076) Destination: Denver, CO (80216)

$124.00

$126.19

3lb. Package

Actual Rate

MumbaiGATEWAY TO INDIA

International Economy

Source: The Colography Group, Inc. ©2017 CGI all rights reserved.Note: The above rates are 2017 commercial published rates for import shipments from India. The applicable international fuel surcharges for FedEx and UPS are 2.5% and 4.25%, respectively.

$117.21

$117.22

$4.98

$2.93

$4.00

$3.85

Base Rate Fuel Residential


Commonly Overlooked Costs incurred for U.S. DeliveriesExample of commercial carrier surcharges for U.S. ground package deliveries

Additional handling $ 10.85 $11.00

Address correction $ 13.40 $14.00

Missing or invalid account number $ 13.40 $14.00

Large / oversize package $ 70.00 $72.50

Delivery intercept / reroute (air) $ 13.40 $14.00

Residential delivery (air) $ 4.00 $4.00

Residential delivery (ground) $ 3.40 $3.45

DAS commercial (air) $ 2.45 $2.60

DAS commercial (ground) $ 2.30 $2.45

DAS residential (air) $ 3.80 $3.90

Extended DAS commercial (air) $ 2.55 $2.60

Extended DAS commercial (ground) $ 2.40 $2.45Source: The Colography Group, Inc. ©2017 CGI all rights reserved.Note: Not an exclusive list of all surcharges.

Carrier Surcharge


Global Direct Entry (GDE)

• An innovative means to drive efficiencies and cost savings within an importers’ supply chain, benefitting both you and your customers located throughout the country

GDE components: Offshore sourcing Logistics Customs brokerage USPS final mile delivery

Who Benefits: Your customers Your bottom line Your ability to compete-speed to market

Solution that Reduces Costs and Has Competitive Transit


How Does Global Direct Entry Work?

GDE Life Cycle• Pick up parcels from offshore customers• Print labels and postage using USPS Global Shipping Software or PC

Postage equivalent• Consolidate parcels-by air or sea• Arrive at destination and clear customs (no duty for parcels valued at $800

or less going to 1 addressee on a single day)• Hand over parcels to the USPS for final delivery


Global Direct Entry: Features

Door to door service in 4-8 days Integrated shipping platform for package preparation Customs clearance End-to-end visibility Courier level expedited shipping service Competitive pricing well below courier rates Provider as single point of contact for customer service Shipment have look and feel of a domestic shipment


Last Mile Solutions-What works for your customer?

• First Class Mail/First Class Parcel

• One zone for the USA-inject from any US gateway (i.e. JFK)

• Light weight products up to 15.99 ounces w/limited tracking

• 3 to 4 days service within the USA-great for low value products

• Priority Mail

• Delivery confirmation available-higher value shipments

• Up to 70 lbs. anywhere in USA

• Zone Based with a 2 to 3 days within the USA

• Parcel Select/Parcel Select Lightweight– 3 to 6 days transit time within the USA

– Ideal for low value items

– Limited tracking


Targeting US Consumers

EVERY DOOR DIRECT MAIL®

United States Postal Service – January 2017

of households saythey read or scantheir mail daily.81%

76% of consumers havebeen influenced topurchase by Direct Mail.

75% of 25- to 34-year-oldshave made a purchaseas a result of Direct Mail.

21


United States Postal Service – January 2017 22

What is Every Door Direct Mail?

An efficient and affordable service for businesses that want to target specific areas in their local market without requiring

names and addresses on the mailpieces.

Low Tech Mail Process +

Easy-to-Use High Tech Solution





Find your local customers by using the online mapping tool.► By City► By ZIP Code► By Location► By Intersection

Online Mapping Tool

Access the Online Mapping Tool @ https://eddm.usps.com



Enter Your Location

Enter or modify search criteria

here.

Search by:City/state combinationZIP CodeCombination of street, city, state, and ZIP Code


Where to Target Consumers

MT

WYID

WA

OR

NVUTCA

AZ

ND

SD

NE

CO

NM

TX

OK

KS

AR

LA

MO

IA

MNWI

IL IN

KYTN

MS AL GA

FL

SC

NCVAWV

OH

MINY

PA

MDDENJ

CTRI

MA

MEVT

NH

West Region• California, is the most

populous state in the U.S.

• Large concentrations of retirees and high income households – both with discretionary revenue

• Consumers are commonly characterized as early adopters of online shopping habits of new technology, fashion apparel/accessories, cosmetics, etc.

Midwest Region• Make up the largest concentration of warehouse

fulfillment facilities for shipments to consumers

• Heartland for consumers working in the manufacturing, agriculture and industrial jobs

Northeast Region• New York is the most

populous city in the U.S.

• Large gateway for U.S. inbound Consumer merchandise

• Very high household income and discretionary revenue

• Known for multi-cultural consumers that have online buying habits

South Region• Houston is the 4th largest city in the U.S. and Texas GDP ranks alongside of countries like

Canada and India

• Large concentrations of students and up-in-coming professionals with families with buying habits on sports, technology, fashion apparel /accessories, toys, etc.

U.S. Regional Consumer Insight

26


Higher Concentrations of U.S. Online Consumer DeliveriesLarge populous locations also have high concentrations of package deliveries

AK

MT

WYID

WA

OR

NVUT

CA

AZ

ND

SD

NE

CO

NM

TX

OK

KS

AR

LA

MO

IA

MNWI

IL IN

KY

TN

MS AL GA

FL

SC

NC

VAWV

OH

MINY

PA

MDDE

NJ

CT RI

MA

MEVT

NH

HI

> 120M

< 10M

Annual Volume


B to C Consideration-Growing Your Business


In Conclusion• Using a multi carrier partnership approach will give you the best bang

for the buck

• Inject your parcels into the USA using a multi gateway approach using appropriate zip code distribution to drive profitability and reduction of customer complaints

• Expand beyond the Indian diaspora using EDDM and other direct mail methods to supplement social media efforts

• Utilize Global Direct Entry vs. traditional methods of distribution to improve the customer experience and reduce costs

• Product value, customer expectations, brand image and volume of shipments drive last mile delivery choices-question your provider

• Effective March 10- $800 deminimus• Trans shipment opportunities to S. America and Canada


Thank You

Education

Delivering Your Products To Customers In USA – by United States Postal Service at eTailing India Expo'17