USPS Issues Take Toll On eCommerce Deliveries

Delays at the Unites States Postal Service are starting to take their toll on eCommerce deliveries. As Postmaster General Louis DeJoy prepares to testify before the Senate Homeland Security and Governmental Affairs Committee in a virtual hearing on Friday (Aug. 21) and slowdowns persist across the country, several companies are taking their grievances — and alternate delivery plans — public.

“The United States Postal Service continues to be strained, and we realize the burden this puts on our sellers. Delivery and scan delays persist, and we are monitoring not only the delays but ongoing negotiations in Washington,” said eBay VP of Seller Operations and Engagement Marni Levine in a blog post. “We are continually monitoring shipping developments and USPS delays. We are working on other affordable, more reliable delivery options for sellers. Stay tuned for important developments in this area in the coming weeks.”

Exactly what those development could be are unknown at present with UPS and FedEx working at capacity. In the blog post, Levine says eBay is extending estimated delivery dates to give buyers a more reasonable expectation of when items will be delivered. She assured the company’s sellers that these extended estimates should enable the buyer-seller relationship to stay intact.

Patrick Green, who runs an eBay store that sells golf clubs, told The Wall Street Journal nearly half of his USPS shipments since May have been late, with roughly a quarter of deliveries taking more than a week to arrive at their destinations. “These delays lead to a ton of extra work for me,” the Connecticut-based analytics consultant told the newspaper. “When I see an item has arrived in five days, I consider that lucky.”

In July, USPS delivered 91.6 percent of first-class and priority mail packages on time. That’s  the lowest rate since the pandemic started, when the rate was 91.1 percent, according to ShipMatrix Inc., which analyzes shipping data.

Service improved after the USPS added an additional day to some delivery commitments in late April, but it has not yet returned to pre-pandemic levels, according to ShipMatrix. The firm said 93.8 percent of parcels arrived on time between Aug. 2 and Aug. 12.

The USPS is just one option for eCommerce companies, one that they choose based on data and the types of shipments that need to be made. Tania DeStefano, director of planning, merchandise and supply chain at Italian fashion eCommerce company M.Gemi, says the USPS has presented some issues, but not severe ones.

“It presents a little bit of a problem but we have always used a tiered approach for our different service levels and different providers,” she tells PYMNTS. “So some of the closer regions are being delivered by USPS and some are being delivered by UPS. And we actually have a third party fulfillment center in Italy as well. We have accounts readily available at many different shipping providers and we’re able to pivot that way. And we always work with our reps at all our carriers.”

The USPS issues have a downstream effect as well. UPS, DHL and FedEx use it to handle a portion of their deliveries via the same Parcel Select service used by Amazon.

“In cases where it’s not actually profitable for Amazon, UPS, FedEx or DHL to make the delivery, they actually rely on USPS,” Mario Paganini, head of marketing at Shippo, which provides software to connect businesses with shipping services, told CNBC. “It’s much more cost effective to bring a large volume of halfway or all the way across the country and then have the USPS do the last-mile delivery.”