Christmas in August Postal Service: For this agency, the UPS strike is proving a bonanza.


THE TEAMSTERS union strike against United Parcel Service has been a giant headache for the nation's mail-order companies, and for most of UPS' competitors, who are unable to cope with the massive surge in parcel orders suddenly headed their way. But for one competitor, the U.S. Postal Service, the strike is proving to be an unexpected bonanza.

The extra business isn't overwhelming post offices. Heavy volume, after all, is the usual and customary situation for the Postal Service every December during the Christmas season. In fact, the flood of UPS mail being shifted to the Postal Service hardly compares with the end-of-year volume: To keep pace with the fallout from the UPS strike, the Postal Service has hired 4,100 temporary workers; that's not even 10 percent of the 45,000 short-termers hired each December. The agency also has instituted Sunday service in selected areas to clear up backlogs.

So far, the agency's parcel post service is up 20 percent; guaranteed overnight mail is up 70 percent and Priority Mail (delivery within two to three days) is up 50 percent. These are big money-maker products for the Postal Service. For top officials it is, indeed, Christmas in August.

The quasi-public agency can use some good fortune. It has set the wheels in motion for a one-cent increase in first-class postage, to 33 cents, sometime next year. That would raise an additional $2.5 billion and wipe out projected deficits.

But if the Postal Service manages to hold onto a good chunk of the new business coming its way from the UPS strike, its fiscal outlook could change quickly. And so far, the responses from the agency's new customers are very encouraging. J. Crew, the upscale clothing retailer, has been thrilled with the results of its shift to the Postal Service and expects to add the agency to its delivery mix once the strike ends. Other mail-order companies echo that sentiment.

This is good news for Americans who depend on the Postal Service for the vast bulk of their mailing needs. More parcel volume means more revenue, which in turn could help stave off future price increases on first-class mail. Even in the disruption caused by this strike, there is a silver lining.

Pub Date: 8/16/97

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