Recently the USPS announced several new fees, including a dimensional non-compliance surcharge as well as a non-standard fee. To understand why these changes are being implemented, it’s important to take a step back to examine where the USPS has been and where it’s going.
A Little About the USPS
The USPS has been around for a long time—their first Postmaster General was Benjamin Franklin if that gives you an idea. They are also a huge organization: as of 2021, they had 516,636 career employees and 136,531 non-career employees. They generally don’t receive taxpayer dollars for funding even though they are part of the federal government, and if they were in the private sector, they would be #43 in the 2021 Fortune 500. Before the meteoric rise of e-commerce, the USPS focused on letters and other printed materials. Adaptation was necessary as more and more businesses embraced shipping their products, so USPS switched their strategy and entered the world of e-commerce.
Fast forward to March of 2021 when the USPS was facing the consequences of years of losses. Postmaster Louis DeJoy announced USPS’ 10-year plan, ‘Delivering for America’. You can read it here, but to summarize, some big changes were in the works. These changes included organizational shifts as well as goals to avoid projected losses and to eventually begin to turn a profit.
New USPS Fees
It is often said that the definition of insanity is trying to do the same things to get a different result. The changes the USPS is aiming to make are very large and naturally require a different approach. The new fees that recently went into effect for the USPS can be seen as evidence of the way the USPS is shifting. The dimensional non-compliance fee is designed to streamline operations by penalizing shippers who don't provide dimensions to the USPS upon tendering a package. This saves the USPS precious time that would have otherwise been used for auditing packages. The non-standard fee allows the USPS to narrow the field in terms of what packages they are given to ship and enables them to catch-up to pricing by competitors like UPS and FedEx.
Where the USPS is Headed
The changes happening at the USPS are indicative of progress in their goals laid out in their ‘Delivering for America’ 10-year plan. We can expect to continue seeing more changes implemented as the USPS strives to reach their goals.
This post was inspired by Executive Vice President of iDrive Logistics, Jake Wertner's, comments on the latest episode of the “Tee Up: Logistics Insights” podcast (you can listen here).