USPS is the country’s original nationwide volume parcel carrier, and has been pushing the position to SMB’s of late to bolster its market share in the category. Their most formidable competition may be coming from within: mounting contractual debt combined with decline in First and Third-Class volume, long their profit centers now short on volume and corresponding revenue. Is privatization their road to profitability?
Across the pond, UK equivalent Royal Mail is actively considering such a move, capitalized by a London Stock Exchange float. The imminent: “We are committed to injecting private capital into Royal Mail to help ensure the ongoing viability of the company. Momentum will continue to as we put all of the building blocks into place,” stated business minister Michael Fallon. Royal Mail has appointed Barclays Bank as its adviser, and hired Goldman Sachs, Merrill Lynch and Bank of America to pitch the company to prospective investors. The motivation: demonstrated growth in parcel revenue they’d like to continue realizing by expanding capacity to accommodate.
Would greater parcel capacity manifest with USPS operating as a wholly private organization? Their debt and decline in personal and bulk mail volume have developed from occurrence to trend; those issues will have to be addressed. Private capital infusion and operation could provide options currently unavailable, stave reoccurring debt and revenue loss, and further monetize the organizations’ unrivaled geographic distribution and market reach with increased volume ability of profitable B2B and B2C parcel. All with the ability of maintaining First and Third-Class service consumers and marketers would miss should it cease.
It’s a new day for USPS – could this be their new way? Could domestic and global interconnect parcel shippers benefit from it?
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