Hello! Welcome to SLB Performance’s bi-monthly newsletter. We hope you find the information useful. If you would like to learn more about what SLB Performance offers, just let us know.
UPS is finding out that in-housing its former SurePost parcels is proving costly to the last-mile carrier. UPS and the US Postal Service (USPS) did not reach an agreeable financial agreement at the end of 2024 for the USPS to continue to perform last-mile delivery services on behalf of UPS and, as such, UPS brought the service in-house and renamed it UPS Ground Saver.
As part of in-housing the service, UPS also increased SurePost rates for packages 1-9 pounds by 9.9% starting January 13, 2025.
UPS SurePost was designed to be a more economical delivery service for businesses, particularly retailers, to offer to customers willing to wait a few extra days.
However, UPS overpriced it for the market and caused many customers to look for lower-priced options elsewhere.
UPS also found out that it was a costly service for it to do on its own. During Q2, it made more delivery stops for the service than expected, hurting results by about $85 million, according to CEO Carol Tomé and causing Ground Saver volume to fall more than 23% year-over-year during the quarter.
Now it seems that UPS and USPS are back at the table discussing the service. But, despite a new postmaster general, the USPS has its own agenda to make the USPS profitable so it’s likely whatever agreement UPS and USPS may come to, if any, will likely result in a service that may cost customers less than the current Ground Saver but more expensive than the previous SurePost.
What does this mean for you?
The last-mile delivery market has more options today than just a few years ago. Explore your options – regional carriers, tech platforms and more – but, consider your requirements and remember, not all are equal.
Know Your Surcharges and Rates – July 14 FedEx Surcharges
UPS has followed FedEx and announced it too will round up when determining the dimensions of a package, also effective Aug. 18.
Effective Aug 18, FedEx will round every fraction of an inch/centimeter up to the next-higher inch/centimeter.
*Reach out to me if you have any questions about these changes.
Why am I telling you this?
I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies, like yours, reduce supply chain costs, implement BI tools, improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies like yours in how to mitigate costs and improve efficiencies. I am here to help you better understand the market. So twice a month, I’ll share relevant small parcel and supply chain news.
Let’s talk! An initial consultation with me will cost you nothing. Click here to schedule a call.
Look for the next Jay’s Parcel Notes, a twice a month LinkedIn newsletter for additional news and thoughts.
Jay Kent