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The USPS’ New “Delivering for America” Service Level Agreement and What Your Business Can Learn from It

The United States Postal Service is hardly known as a model of efficiency. They are an entity that routinely raises rates not to improve service delivery or expand offerings but to shore up deficiencies in their bloated pension plan.

When they made their big announcement this fall about a change in service delivery for First Class Mail (FCM), you likely heard more about it from your bank than your mail carrier.

After a detailed study of their resources, the USPS determined that they were much better prepared to deliver mail to addresses within 140 miles (or an estimated three-hour drive) through their well-established ground transportation network, than those over longer distances. Delivery over 140 miles required reliance on partners for air transportation using non USPS owned equipment and was constantly mired in weather delays.

The Delivering for America 10-year Strategic Plan is a designed to “improve service reliability and predictability” by basically changing the service level agreement (SLA) we’ve all come to depend on from the USPS. Now delivery commitment times will be tied to distance, not just class of mail. Addresses within 140 miles can expect to continue to receive FCM within 2 days – which is great considering the struggles that many of us witnessed in delivery times during the pandemic – but addresses of greater distances require a longer time in transit and will result in standard delivery times up to 5 days.

Alongside this change in SLA came a rate increase of $.03/each for first class mail, a roughly 6.8% increase that corresponds to the similar rate increases announced by FEDEX and DHL beginning January 1, 2022.

As much as we like to grumble about the inefficiencies of the postal service and how nice it must be to have a monopoly on mail delivery so you can simultaneously announce slower delivery and a higher price, there is one important lesson for business owners to learn here:

The researchers behind Delivering for America Strategic plan saw an opportunity and capitalized on it. They realized that their local delivery network was stronger than their air network and agreed to double down on their promise for 2-day FCM delivery in the local market. When they were trying to achieve 3-day delivery via FCM mail everywhere, they were in such a rush to get long distance mail off the floor of the processing centers that they ignored more easily deliverable pieces and ultimate failed both locally and nationally. By absolving themselves of the lofty goal of 3-day delivery coast to coast they’ve agreed to focus on what they are good at. The lesson for the business owner that we repeat every day is don’t try to be everything to everyone. Instead focus on what you do best and market the heck out of it. That is where you will find your just reward.

This post is courtesy of MMC Principal Jennifer Koon

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