usps consolidators: The U.S. Postal Service (USPS) announced a big change that could affect how much you pay for shipping. Starting soon, USPS will end discounts for shipping consolidators like UPS and DHL. This move aims to help USPS cover losses but might lead to higher costs for consumers.
What Are Shipping Consolidators?
Shipping consolidators are companies that collect packages from various businesses and then send them through the USPS network for the final delivery. They help companies save on shipping costs by using USPS for the last part of the delivery process.
Why the Change?
USPS handles around 2 billion packages each year from consolidators. These packages make up about a quarter of all the packages USPS delivers. USPS hopes that by ending discounts, it will increase its own revenue and efficiency.
USPS Postmaster General Louis DeJoy said this move is part of a plan to make USPS financially stable. He explained that the USPS needs to adapt due to changing shipping habits and a drop in first-class mail since 1997.
Impact on Shipping Costs
The change will reduce the number of locations where consolidators can drop off packages from about 10,000 to around 500 large hubs. This means consolidators will have fewer places to deliver packages to USPS for the final mile of delivery.
For big companies like Amazon, which have direct deals with USPS, there won’t be a change. However, for other businesses that rely on consolidators, this could mean higher shipping costs. Consolidators might pass these extra costs on to consumers.
Who Will Be Affected?
Major consolidators like DHL eCommerce, OSM Worldwide, and UPS through SurePost and Mail Innovations will be affected. Some of these companies might have to find new ways to manage last-mile delivery or raise prices.
Already, changes are happening. For example, Pitney Bowes is filing for bankruptcy protection for its e-commerce division. FedEx is ending its FedEx Smart Post service that used USPS and switching to its own delivery methods.
What to Expect
If you use services that rely on shipping consolidators, you might see an increase in shipping costs in the near future. The USPS is making these changes to improve its financial situation, but it could mean higher prices for the products you buy.
Keep an eye on shipping updates from your favorite retailers and shipping services to see how these changes might affect you.
