A parcel delivery industry group is pushing to unearth more information about the U.S. Postal Service's planned price hikes and operational changes to services that key shipping partners rely on.
In a May 22 filing with the Postal Regulatory Commission, the Package Shippers Association called for the regulator to request additional data and information about a proposed 25% average price increase for the USPS' Parcel Select service. The adjustment is slated to occur on July 14.
The association, which represents companies like Amazon, FedEx, UPS, Pitney Bowes and DHL eCommerce, said the proposed Parcel Select price increases "are unprecedented" and signal there may not be enough effective marketplace competition. Regulators need to assess if that is indeed the case, the association added.
Parcel Select is a low-cost ground delivery service used by consolidators like Pitney Bowes and DHL eCommerce. Such companies send their customers' packages to Postal Service facilities for last-mile delivery. In addition to raising prices for the Parcel Select offering, the Postal Service is pushing to have consolidators bring packages to facilities further upstream from their destinations, a shift that experts say could generate delays and additional cost increases.
The Package Shippers Association is concerned the pending price bumps and related actions "may limit access to more affordable, same day service offerings, forcing shippers and end consumers to pay more for degraded service."
Additional data will help the association and other stakeholders evaluate the proposed changes to Parcel Select, according to the filing. The information it says the Postal Regulatory Commission should request includes:
- Confirmation that the USPS is renegotiating certain agreements to incentivize earlier entry of package volume into its network.
- Details about any other efforts taken or planned to have Parcel Select volume be injected into its network at earlier stages.
- All studies and analysis conducted to determine what impact earlier volume entry will have on shippers' costs.
- All studies and analysis conducted to determine if the Postal Service has enough market power to substantially raise prices or reduce quality for Parcel Select without losing business to competitors.
The Postal Service is standing against the Package Shippers Association’s efforts. In a response filed on May 24, the agency said regulators should reject the association's request in part because "the questions are overbroad."
"These questions go well outside the scope of a competitive price change docket and would serve only to further delay the instant proceeding, which would result in more confusion and uncertainty for our customers," the Postal Service said.
