Skip to main content
Advertising

Originally published August 14, 2013 at 9:08 AM | Page modified August 14, 2013 at 10:42 AM

  • Share:
           
  • Comments (0)
  • Print

Postal Service revamps priority mail program

The financially struggling U.S. Postal Service is revamping its priority mail program to raise revenue and drive new growth in its package delivery business.

Associated Press

Most Popular Comments
Hide / Show comments
No comments have been posted to this article.
Start the conversation >

advertising

WASHINGTON —

The financially struggling U.S. Postal Service is revamping its priority mail program to raise revenue and drive new growth in its package delivery business.

The agency is now offering free online tracking for priority mail shipments, free insurance and date-specific delivery so customers know whether a package will arrive in one, two or three days.

Postal officials said Wednesday they expect the changes to generate more than $500 million in new annual revenue. The changes - including redesigned boxes and envelopes - are effective immediately.

The improvements come as the Postal Service is reeling from losses this year totaling $3.9 billion. The agency has been trying to restructure its retail, delivery and mail-processing operations, but says its financial woes will worsen without help from Congress.

The changes to priority mail will help the Postal Service better compete with rivals FedEx and UPS in the increasingly lucrative area of shipping products purchased from online retailers, said Nagisa Manabe, the service's chief marketing and sales officer.

"We're looking at strong underlying growth as Americans increasingly shop online," Manabe said in a conference call with reporters. She estimated the sharp pace of growth would continue "well past 2020."

Until now, priority mail has been advertised as a 2-3 day delivery service, with customers unable to know exactly how long it would take for a parcel to reach its destination. That left too much uncertainty, Manabe said, especially for small businesses. Now, they will know the specific date on which a package will be delivered.

Demand from small business customers also helped convince the agency to offer free insurance, $50 coverage for most priority mail shipments and $100 coverage for priority mail bulk orders shippers.

As part of the changes, the service has rebranded its overnight express mail service as priority mail express. That service will still offer $100 of free insurance.

The Postal Service is launching a major advertising campaign to make customers aware of the new changes, including television ads starting next week. Newly designed priority mail boxes and envelopes are already appearing at high-volume post offices, and customers should see them nationwide within the next couple of weeks, Manabe said.

The service has struggled for years with declining mail volume and a 2006 congressional requirement that it make $5.6 billion annual payment to cover expected health care costs for future retirees, something no federal agency does.

The changes announced Wednesday come in one of the areas where the Postal Service can alter its business model without seeking congressional approval. The service would also like to end most Saturday mail delivery, but that has met resistance from federal lawmakers.

"I wish we had the flexibility to make that change," Postmaster General and CEO Patrick Donahoe said Wednesday.

A bipartisan Senate proposal would let the agency end Saturday delivery in a year and make changes that would reduce pensions and retiree health care costs.

---

Follow Sam Hananel on Twitter: http://twitter.com/SamHananelAP

News where, when and how you want it

Email Icon

Hurry! Last two weeks to save 15%.

Hurry! Last two weeks to save 15%.

Reserve your copy of "The Seattle Sketcher," the long-awaited book by staff artist Gabriel Campanario, for the special price of just $29.95.

Advertising

Partner Video

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►