Agencies skip USPS for shipping services

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Federal agencies prefer private sector competitors to the Postal Service, sending the USPS only 2 percent of their General Services Administration shipping schedule-based business, says the service's office of inspector general. 

In a report (.pdf) dated Jan. 18, the IG says government agencies spent $336.9 million in fiscal 2012 through GSA's Schedule 48, the governmentwide contract vehicle that includes domestic delivery services. Most of that money went to companies like UPS and FedEx, which have been active in the schedule since 2001, while USPS didn't start participating until 2009.

The report says that reducing prices and expanding sales staff could lead to the Poatal Service to capture 6.6 percent of the federal agency shipping spend, (based on its overall lightweight package market share), creating an additional $17.4 million of revenue annually during fiscals 2013 and 2014.

One major challenge for the Postal Service is its high price and limited offering of 2-day and 3-day guaranteed express delivery products. "Postal Service prices on Schedule 48 were not competitive, in most instances, with those of FedEx and UPS," says the report.  

Auditors also recommend expanding the federal government-specific sales force. Currently 18 team members covering 60,000 agency locations.

The audit says these issues compound other more general problems such as the limited payment methods it accepts, although the Postal Service has started development of a Syncada payment system through an agreement with U.S. Bank.

Syncada is a commercial freight auditing and payment platform used by many agencies and required by the Defense Department.

The report notes it is unlikely that USPS will secure significant DoD business because Defense also gives preferential treatment to shippers that have their own air fleet and agree to make this fleet available to it during a national defense crisis, says the report.

For more:
- download the report (.pdf)

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