The US Postal Service (USPS) aims to grow its international business with guaranteed productsoffered through the ‘Kahala Postal Group’ (KPG) of selected international postal operators, a top
official told CEP-Research in an interview. Royal Mail and Spain’s Correos have just agreed to jointhe six-strong group.The USPS is putting a stronger focus on its international business than in the past, and aimsto target small US firms for their international express mail and deferred parcel business, PaulVogel, managing director global business and senior vice president, said on the sidelines of thisweek’s World Mail & Express Logistics Middle East, Africa & South Asia conference in Dubai.He took charge of the newly-created Global Business unit in summer 2006.
“Our strength is our retail network. That is great for residents and small businesses,” heexplained. But he stressed: “I do not want to steal business from FedEx and UPS. Similarly they donot want to go for residents and small businesses.”
According to the 2006 US Postal Service annual report, international mail (includingpackages) accounted for $1.79 billion in revenues, 792.9 million pieces of mail and 257.2 millionpounds of mail. USPS had total revenues of $72.8 billion.
USPS currently offers a premium international service called “Global Express Guaranteed” incooperation with FedEx Express for documents and merchandise up to 70 pounds with transit times of1-3 days.
Its mid-priced “Global Express Mail” product for international documents and merchandise upto 22-70 pounds (depending on destination) is generally offered as a traditional postal ExpressMail Service (EMS) to most countries worldwide.
Since 2005, however, an upgraded service with a date-certain, money-back guarantee andtransit times of 3-5 days has been offered to Australia, China, Hong Kong, Japan and Korea, whosenational postal operators are the other KPG members (the six posts sealed their cooperation atKahala, Hawaii, several years ago). USPS also has several slower and lower-priced economy productsfor international mail and packages.
At the same time, USPS is also interested in signing individual agreements with smallbusinesses for their international shipments, depending on their particular requirements. “I do notwant a suite of business products but customer agreements,” Vogel emphasised. Such agreements wouldbe marketed through intermediaries already providing mail services for those companies.
Britain’s Royal Mail and Spain’s Correos have just agreed to join the KPG alliance, Vogelsaid. The fundamental aim was to expand the alliance to other postal operators in Europe andelsewhere as they upgraded their performance standards to be able to provide guaranteed services. “I believe most Posts can improve their service,” Vogel commented. But he added: “If a post cannotpromise visibility and service, then I need an alternative.”
Although the Kahala members had a reasonably balanced flow of items, there were no plans toinvest in any postal air network, Vogel stressed. USPS has a long-term agreement with FedEx for itsinternational uplift, and uses both FedEx and UPS alongside commercial airlines within the USA.
