Postal Service Aims to Bring In $500M a Year With New Package Serivces

Robert Ray/AP file photo

The Postal Service rolled out a series of changes to its package delivery service Wednesday, projecting the improvements will result in $500 million in additional annual revenue.

USPS will now provide free insurance to coverage of up to $100 for customers using priority mail. This move will better align the Postal Service with its competitors, agency officials said.

Priority mail users will also receive day-specific schedules for their packages’ arrival. Each shipment will include an immediate one-, two- or three-day delivery estimate, depending on how far the package is traveling. Previously, the Postal Service told priority mail customers it would deliver the packages in “two to three days.”

The Postal Service will also offer free tracking of priority mail products. USPS will upgrade the service to include more scans per shipment, allowing customers to get up to 11 updates per delivery.

The announcement comes as the Postal Service has seen dramatic increases in its package business, thanks in large part to the growth of e-commerce. Package delivery has grown 14 percent over the last two years, and USPS officials expect that to grow an additional 41 percent -- to $370 billion annually -- by 2017.

“We believe this Priority Mail line-up positions the Postal Service very competitively in the shipping marketplace and gives small businesses and other frequent shippers a continued and compelling reason to do business with the Postal Service,” Postmaster General Patrick Donahoe said.

USPS officials expect the changes to assist in growing package revenue. By offering services available in the private sector -- in addition to its nationwide delivery options -- the Postal Service hopes to recruit new business.

“Our revamped Priority Mail product line should be a game changer in the shipping marketplace,” said Nagisa Manabe, USPS’ chief marketing and sales officer. “We’re meeting the rising expectations of customers with important new features.”

Donahoe added that without the operation investments USPS has made over the last few years, these improvements would not have been possible. He said the Postal Service would like to make additional changes to its business, but cannot do so because of Congressional restrictions on the agency.

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