USPS Last Mile Delivery Challenges and Opportunities

The last mile of delivery is a crucial part of the USPS's overall delivery process, and it's not without its challenges. The USPS has to navigate through congested urban areas, construction zones, and other obstacles to reach customers' doorsteps.

The USPS is facing a significant increase in last mile delivery demand, with a projected 25% growth in parcel volume by 2025. This growth is largely driven by the rise of e-commerce, which has led to a surge in online shopping and subsequent delivery needs.

Despite these challenges, the USPS is exploring innovative solutions to improve last mile delivery efficiency. For example, they are investing in new delivery vehicles and infrastructure, such as package lockers and self-service kiosks, to streamline the delivery process.

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The USPS has a significant advantage in the package delivery industry due to its largest and best-developed last-mile delivery network in the world.

The USPS has a network of established preferred shipping partners, combining expertise and optimization for fast, efficient global shipping. This enables them to manage last-mile delivery more effectively than other providers.

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Almost 60% of U.S ZIP codes represent rural areas, and the USPS excels at delivering to these addresses because of its mature on-the-ground network.

The USPS has access to every business and residential address in the nation, spanning 158 million delivery points with the ability to deliver packages to those addresses seven days a week. This preexisting network enables the USPS to deliver rural packages more cost-effectively than any other provider.

The USPS shipped 7.3 billion packages in 2020, making it the single-largest postal authority globally, delivering almost half of the world’s mail.

This unmatched shipping volume capacity allows the USPS to handle increased volumes, making it an ideal partner for businesses that ship hundreds of packages every day.

Informed Delivery, a service offered by the USPS, allows customers to preview images of their upcoming deliveries, providing a level of convenience and visibility that is a big plus for customers.

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Having access to accurate data is key to better last-mile visibility, and that begins with better-connected devices. Innovations like the Internet of Things (IoT) can help shippers create a well-integrated digital ecosystem.

A network of devices connected through the IoT allows disparate systems to collect and share data, providing a full picture of last-mile delivery movement. This includes departure from the warehouse or distribution hub to arrival at customers' doorsteps.

The information gained through the IoT is precise. Using sensors on the product itself, you can see exactly where the product is at any time.

A better-connected network enables faster decision-making at the last mile. Artificial-intelligence-enabled IoT and machine learning can identify traffic patterns and predict delays at certain ports or routes.

The IoT can tell you exactly where and when items were opened or delivered, and even provide information on compromised product. This includes changes in temperature, light, or humidity.

Settlement can be triggered automatically after specific actions have taken place. For example, once items are delivered to a partner and pass inspection, payment can be sent to all needed parties automatically.

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The Postal Service has historically benefited from consolidators bringing volume closer to the final stages of the delivery process through worksharing.

Worksharing allows the agency to avoid added costs and operational strain associated with processing and handling extra parcels. Most of the Postal Service's commercial packages and mail are covered by a workshare-based discount.

Relying on the agency for more steps in the delivery process means increased exposure to potential delays in its network, complicating consolidators' ability to offer reliable and low-cost services.

The potential move could be an attempt by the Postal Service to generate more direct relationships with shippers that use workshare partners while also advancing its long-term cost-savings goals.

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Changes to USPS partnerships could lead to workshare partner shakeups, as consolidators may struggle to offer reliable and low-cost services without the associated discounts.

Historically, the Postal Service has benefited from consolidators bringing volume closer to the final stages of the delivery process, allowing it to avoid added costs and operational strain.

A future with fewer delivery unit volume injections would complicate these companies' ability to offer reliable services through the Postal Service, experts say.

Relying on the agency for more steps in the delivery process means increased exposure to potential delays in its network.

Consolidators could consider shifting volume to other carriers to keep shipping speeds in line with customer needs.

Regional carriers may see an increase in volume if consolidators shift their business to avoid potential delays in the USPS network.

I've seen companies adapt to changes in the market by diversifying their shipping options and finding new partners to work with.

The USPS's proposal for a network overhaul is part of its 10-year "Delivering for America" plan. This plan aims to optimize the agency's facilities footprint by consolidating some delivery units into larger-scale sorting and delivery centers.

The USPS is evaluating over 100 new sorting and delivery center locations nationwide to provide faster service between local retailers and consumers. This move will likely affect current network entry points.

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Direct relationships with the USPS can help consolidator-reliant shippers avoid added costs spurred by potential changes. However, consolidators still have advantages to consider, such as being able to get a contract over the finish line quickly.

The USPS shipped 7.3 billion packages in 2020, making it the single-largest postal authority globally, delivering almost half of the world's mail. This volume demonstrates the agency's capacity to handle increased shipping demands.

Informed Delivery, a service offered by the USPS, allows customers to preview images of their upcoming deliveries with an accuracy rate above 95%. This level of convenience and visibility is a big plus for customers.

The USPS has a network of established preferred shipping partners, combining expertise and optimization for fast, efficient global shipping. This partnership enables the agency to deliver packages to every business and residential address in the nation, spanning 158 million delivery points.

Private carriers like Amazon Logistics and FedEx SmartPost are increasingly delivering packages to customers' doorsteps. They often use their own networks and vehicles to reach rural areas where the USPS may not have a strong presence.

Amazon Logistics has been expanding its delivery network to cover more areas, with over 20,000 Amazon-branded vans on the road. This allows them to offer faster and more reliable delivery options to customers.

FedEx SmartPost uses the USPS for the final leg of its delivery, leveraging the USPS's extensive network to reach customers in rural areas. This partnership allows FedEx to offer affordable and efficient delivery options.

Amazon Logistics has also been investing in drone delivery technology, with plans to use drones to deliver packages to customers in remote areas. This could potentially reduce delivery times and costs.

The USPS has been working to improve its last-mile delivery capabilities, but private carriers like Amazon Logistics and FedEx SmartPost are giving them a run for their money.

Having access to accurate data is key to better last-mile visibility, and innovations like the Internet of Things (IoT) can help shippers create a well-integrated digital ecosystem.

A network of connected devices can collect and share data in real-time, providing a full picture of last-mile delivery movement.

This allows for precise tracking, seeing exactly where products are at any time, and even predicting delays at certain ports or routes.

Faster decision-making is possible with artificial-intelligence-enabled IoT and machine learning, enabling route adjustments to reduce customer delays.

The IoT can also provide information on compromised products, such as temperature or humidity changes, and trigger automatic settlement after specific actions have taken place.

Having access to the right supply chain data is crucial to increase efficiency and enhance the customer experience.

Mitigating visibility issues at the first, middle, and last mile is essential to overcome last-mile challenges. This requires real-time data and visibility into every step of the supply chain.

Data can help identify and address issues at the last mile, where deliveries often go awry. For instance, delays or lost packages can be quickly addressed with accurate data.

The right data can also help optimize routes and reduce costs at the middle mile. This can be achieved by analyzing data on traffic patterns and optimizing vehicle routes.

By having access to the right data, businesses can make informed decisions and improve their overall supply chain operations.

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The key to overcoming last-mile challenges is having access to accurate and relevant data, which the Internet of Things (IoT) can provide.

By using IoT, shippers can create a well-integrated, streamlined digital ecosystem that allows disparate systems and devices to collect and share data in real-time.

This can provide a full picture of last-mile delivery movement, from departure to arrival at customers' doorsteps.

A better-connected network also allows for faster, more informed decision-making at the last mile, enabling you to adapt and alter routes as needed.

Using artificial-intelligence-enabled IoT and machine learning, you can identify traffic patterns and predict delays, reducing the chance of customer delays.

The IoT can also tell you exactly where and when items were opened or delivered, and even deliver information on compromised product.

This level of precision and accuracy can help you make informed decisions and improve the overall delivery experience for your customers.