U.S Postal Service Takes Back Its Territory

Earlier this month, the U.S Postal Service announced that they have made a deal with Amazon delivering groceries on a test basis. The U.S Postal Service is a big player in mail delivery services, handling 40% of the world’ mail and visiting homes and businesses alike six days a week.

USPS is now lowering their parcel delivery prices during a time where their  competitors (FedEx and UPS) plan on increasing their prices. Both FedEx and UPS fear that with the recent changes USPS has been making with their services and prices will steal away their customers. This rings true in the case of Amazon, when just last December both FedEx and UPS misjudged the amount of holiday packages and many customers did not receive them until after Christmas.

FedEx and UPS however do not think it’s fair for their companies because USPS a is a government owned delivery service and has a monopoly on the business. This being said, it is also true that USPS has been suffering from a decline over the years due to the creation and embrace of e-mail.

One possible solution that Lenoard proposed was that congress could allow for the USPS  to leave the letter monopoly and let firms and couriers compete for this business like European posts have done. This would give the USPS the opportunity to focus soley on the parcel delivery service and would also avoid financial collapse. Lenoard also goes into the topic of USPS becoming more attractive to private investors that have helped European posts. If this were to happen, then the money that could come from private investors could help USPS with their aging trucks, making it more cost efficient and possibly speeding up their delivery.

USPS’ recent business decisions displays examples of the three strategies of competitive advantage we discussed in chapter two. First USPS competes with FedEx and UPS in differentiation in their deal with Amazon by delivering groceries. I personally think this is pretty unique because it breaks away from the association that USPS has with just letters and packages, they open up the idea to their customers that they can now deliver groceries, creating a more universal delivery service. Secondly, USPS uses competitive advantage in competing on costs by lowering their prices, allowing for cheaper shipping and delivery services than that of their competition. Lastly, USPS is becoming more responsive. They are allowing themselves to be cost effective, flexible by matching market changes in their new grocery deliveries, and reliability by meeting delivery schedules.

I personally am an USPS person, I have my packages delivered by them and I receieve majority of my packages through the USPS. I find their services of great quality and timely delivery.

What type of delivery service do you use and why? If you use either FedEx or UPS would you change your mind after hearing about their delays in their delivery, why or why not? What else could USPS do to give them a competitive advantage?


Source: http://www.businessweek.com/articles/2014-09-11/amazon-casts-its-vote-with-the-postal-service

UPS: The Industry Leader in Quality?

            The United Parcel Service (UPS) has been recognized as an industry leader when it comes to quality for quite some time. In fact, in 2010 they were recognized in the third spot of 10 for top companies for quality only behind Disney and Intel. [1] They have always been concerned with being the best in the industry of their product, which is actually a service that is delivering packaged goods across the globe. UPS delivers 16.3 packages daily only losing less than 1% of those packages yearly.[2] UPS was one of the first companies to have tracking on their packages and more recently with the ever-growing use of smartphones was the first to have an app that allows senders and receivers to track their packages through their app, a first for the industry. With its excellent track record overall especially for on time deliveries one would think UPS has quality under control. Recently, however; the Federal Aviation Administration (FAA) fined UPS $4 Million for failing to make required repairs on their aircraft, maintaining proper records, and flying unsafe aircraft (due to the failed repairs.)

One would think a company that has such a great track record for delivering goods on time and in good condition would have every aspect of their business including the quality and condition of their fleet on trucks, cars, and aircraft. Clearly the FAA does not think UPS is doing such a great job in that department. In thinking about the reasons why they may not be maintaining their aircraft, a few ideas come to mind. First, aircraft repairs take time and money. With profits of 5.8 billion dollars last year, it is safe to assume cost was not the issue.[3] Time is the single biggest thing UPS has to deal with. When providing their service, shipping, they are guaranteeing that package will arrive its destination at a particular time. If an aircraft is being repaired, it cannot fly. If it is not flying, packages are not being delivered. Packages, those are not delivered or not delivered on time is simply bad for business. It is easy to see the domino effect that ensues thereafter. Perhaps there has been a cutback in mechanics and/or inspectors and so there were many oversights. It is also possible that they did make repairs but failed to keep adequate records, which is also alleged by the FAA. Finally, maybe this is all a big misunderstanding.

A spokesperson for UPS states they will defend themselves for this “unreasonable and unwarranted fine.” He says, “UPS has a long history of operating a safe, compliant airline, there was never a safety issue.” Apparently, this fine is stemming from only 9 repairs out of the thousands of repairs they make. Overall UPS has a pretty good safety record. According to the Safety and Fitness Electronic Records System (SAFER), for the last 24 months UPS has had 0 air accidents and 0 fatalities. [4] Maybe this is just a big misunderstanding and poor reporting. I find it hard to believe that UPS would not properly maintain the very things that drive their business. Aircraft are the very thing that delivers the packages. Without them, UPS has no business. It will be interesting to see how UPS defends themselves. What do you guys think? Can you see a company overlooking the quality of their fleet in order to save time? Do you know of any other companies that actually do this?  Let’s hear them in the comments!

Source of Main Article. 


[2] http://www.pressroom.ups.com/Fact+Sheets/UPS+Fact+Sheet

[3] http://www.investors.ups.com/phoenix.zhtml?c=62900&p=irol-newsearnings&nyo=0

*Logo used for Educational Purposes, www.ups.com*