Regardless of the scope and size of the company, if you’re in the business of selling your products online, then you’ve probably already experienced some aftermath of the recent U.S. Postal Service’s (USPS) shipping delays. Many ecommerce sellers are realizing just how reliant they’ve become on the USPS as new operational hurdles and delivery setbacks continue to emerge.
A lot of industry leaders, such as Etsy, Amazon, and eBay, have been protesting against the recent reports of unreliable and unaffordable services performed by the USPS. Local business owners are experiencing serious losses as a result of major shipping mistakes. In one instance, the organization misplaced 200 of one individual’s packages.
If issues like these keep happening, then every ecommerce seller’s company is at risk. With funding on the fritz and pandemic-related financial struggles in the way, the USPS has a long road to recovery ahead of itself.
The USPS’ Influence
With the upcoming presidential election, debate over mail-in voting, and concerns surrounding Postal Service labor limitations, it’s surprising that the USPS managed to deliver 93.7% of is first-class mail packages on time. Despite complaints, that percentage is pretty on par with what other industry giants such as FedEx and UPS are reporting for the same time frame.
It’s important to note that while impressive, this on-time delivery performance remains lower than their 94.9% average in May. That small difference doesn’t seem so small to the people who are on the other side of the equation though.
Even the most widely known name in the industry relies on the USPS to deliver an estimated 40% of its packages. When Amazon and other big-box companies are being forced to figure out how to smooth over key last-mile segments, one can only imagine the effort smaller businesses are having to go through to maintain an already hard to come by competitive advantage.
Cost effectiveness is another critical factor companies need to take into account when they’re considering the USPS’ impact on ecommerce. Most companies find it a lot more affordable to hand over their shipping to the Postal Service, whether it’s for the last leg of the journey, or in the case of many small businesses, the entire process.
According to the head of marketing at Shippo, about 89% of their 50,000-plus customer base use the USPS as their main carrier. You just can’t beat their rates at least for lightweight, inexpensive, and simple shipments.
In order to compensate for delays and other COVID-related issues, it’s very likely the USPS will look to long-term price hikes, especially since they’ve already announced a temporary raise for the upcoming holiday peak season. This increase will eventually trickle down to customers once businesses can no longer afford to cover the costs entirely themselves.
Many online marketplaces like Etsy and eBay are fighting for additional USPS funding to help their rural customers that have no other carrier options survive. While this remains an ongoing battle, don’t take for granted the huge part the USPS plays in the lives of ecommerce sellers on every level.