The Postal Service just took a huge hit that could potentially leave more than a bruise. Since Postmaster General DeJoy assumed his role in May, shipping and mail delays have plagued USPS. As more individuals rely on online ordering, customers in all parts of the country have complained about delays on their USPS packages specifically. Now, these widespread USPS delays have prompted eCommerce giant eBay to move more shipment volume over to the Postal Service’s biggest competitor: UPS.
What’s Causing all the USPS Delays?
A number of reasons are behind the USPS delays that many customers have complained about, and that many online sellers have felt. Higher package demand from COVID-19 is certainly a factor. This, and cost-cutting measures such as stricter dispatch schedules that have forced letter carriers to leave mail and parcels behind have all contributed to the delays USPS is currently facing.
These mail and parcel delays are more than just speculation. Recent studies show on-time delivery rates have dropped by nearly 10% nationwide under Postmaster General DeJoy’s leadership. Prior to DeJoy taking office, this number hovered around 90%.
This continual decrease in the Postal Service’s on-time delivery rates was enough to spur eBay into partnering with UPS. By doing so, the company believes it will better service its enormous customer base, which places a premium on reliability. By the end of September, eBay sellers will be able to print UPS labels up to 62% cheaper than retail rates.
Why eBay Moving to UPS is Bad News for the Postal Service
Currently, eBay is one of the Postal Service’s biggest customers for package services, second only to Amazon. In the fiscal year 2019, the Postal Service brought in more than $743 million in revenue from eBay packages alone. For context, Amazon packages earned USPS more than $2.3 billion during the same timeframe. Simply put, eBay represents a huge piece of business that USPS can’t afford to lose.
Ever since Postmaster General DeJoy assumed his role, eBay had been closely monitoring the Postal Service’s decreasing on-time delivery rate. In a message to the platform’s sellers announcing the deal with UPS, eBay Vice President Marni Levine wrote the following:
“Customers want and expect to receive their packages in the fastest and most reliable way possible, which is why our collaboration with UPS comes at such a critical moment.”
As mail volumes continue to decline, USPS needs to rely more on high-volume customers like eBay to generate more revenue. eCommerce has surged despite the Coronavirus pandemic, and this upward trend for package demand will only continue. However, if USPS can’t execute on-time delivery like it used to, other huge customers may move volume away from them, as well. eBay may just be the first one to jump ship.