There is something to be said about being fashionably late. For parties, it means no awkward making too much small talk waiting for things to warm up; by the time you arrive, things are swinging.
The same can be said for “fashionably late freight." If you are shipping to a bunch of crazy retailers who want you to hit a narrow delivery window, the following are not suggestions that you should take. But if you are not pressed by the “need of speed,” there are domestic freight options that could help you be profitable.
A new option appeared in the form of a request by the United States Postal Service (USPS) in a request to provide “LTL like” services.
USPS now does LTL! Well, sort of. The United States Postal Service will move shipper pallets in the excess capacity of the truckload network that ties over 440 Sectional Center Facilities and 40 bulk mailing centers. USPS is not in the freight P&D (Pickup & Delivery) business, so the shipper has to deliver the pallet to the SCF at origin and pick up the pallet from the Destination SCF.
Current LTL service providers, like Yellow Roadway or ConWay don’t need to worry, since so many small shippers cannot make the P&D to the Postal Service. It is a 24-month market test, but we should expect competitive rates, since the regulatory filing states that the service would be at “risk of losing business to other firms in the LTL shipping space” if it was not competitive. But the question is - does this new entry really compete with LTL services? I think not as much as it competes with, or could help freight consolidators. So how many shippers will use this “space available” service? A better question is - why?
Let’s look at that first.The USPS market test is a way for the Postal Service to create a collaborative transportation network to help “lift” some of the cost burden off of the required network. Last year, I had a long conversation with a “senior” USPS manager of the SCF network operations about the growing unused capacity in the SCF line haul network. We talked about what some other private and dedicated fleet operators were doing to fill unused capacity.
What became clear in the conversation is that the USPS is, in reality, a huge, time-sensitive, pool-point consolidator. Consider there are over 480 “nodes” supported by over 220,000 lane pairs, the USPS has a huge network. UPS and FedEx are simple “pikers” when compared to the size and scope of the USPS network. Consider how parcel and printed matter mail move through the USPS system and the parallel is accurate.
While there is a volume of first class mail that does move through the “air," much of the mail still moves on the “ground." Bulk mail, magazines, newspapers, catalogs, parcels, oversize envelopes, and some 1st class moves in the SCF line haul operations. That is a lot of mail. That volume is falling. And the mail still has to move on time, so the SCF line haul network has open capacity in it. The trucks, operated by different contract carriers, run as a scheduled service with specific capacity from point to point. Like the airlines, the truck runs from SCF to SCF, full or only half full. And they are running more often half full in more and more lanes.