US Postal Service 2012 Annual Report Download - page 30

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2012 Report on Form 10-K United States Postal Service- 29 -
SHIPPING AND PACKAGES
Shipping and Packages revenue continue to show strong year over year growth. Responding to the opportunity created
by the growth in packages shipped for purchases made online, we have been able to capture much of the newly created
volume and increase market share. Ground shipping services have proven to be very popular in e-commerce fulfillment,
as companies push to keep their costs low. Revenue from First-Class Packages grew 18.7% in 2012, compared to 2011.
Parcel Return and Parcel Select Services revenue increased by 27.2%, compared to 2011, as we continue to capitalize
on the competitive advantage we have in providing the “last mile” service.
Key strategies driving growth in 2012 included more competitive and aggressive pricing, introduction of new services, and
additional product features. In 2012, we increased our use of negotiated service agreements and were able to capture a
greater number of large customers by offering competitively-priced contracts. We also took advantage of the pricing
flexibility created by reclassifying certain package services from Market-Dominant to Competitive. New product
introductions included the addition of a new Priority Mail Flat Rate box, new Flat Rate Express Boxes, and the new Flat
Rate Padded envelope. In 2012, we introduced additional payment methods with the customers’ ease of use in mind.
Scan-Based Payment provides the option for customers to pay once mail is inducted into the mail stream. ePostage is a
new convenient payment option that can be easily integrated into e-commerce shipping platforms. In addition, new
product features such as “Package Intercept” and “Date Certain Delivery” were introduced. Package Intercept allows
customers to stop and divert packages while “Date Certain Delivery” allows customers to have their packages delivered
on a specific day.
The following two tables present detail revenues and volumes for Shipping and Packages for the years ended 2012, 2011,
and 2010, by each service line.
(Dollars in millions) 2012 2011 2010
Priority Mail $ 5,940 $ 5,636 $ 5,455
Parcel Select, Parcel Return & Standard Parcels 1,741 1,369 1,171
Package Services 1,589 1,581 1,531
First-Class Packages 11,524 1,284 1,170
Express Mail 802 800 829
Total Shipping & Packages Revenue $ 11,596 $ 10,670 $ 10,156
Shipping & Packages Revenue *
*Note: The totals for certain mail categories for the prior year have been reclassified to better reflect classifications used in the current year. These reclassifications did not impact
total Shipping and Packages revenue for the prior year.
1 Includes First-Class Mail Parcels and First-Class Package Services.
(Pieces in millions) 2012 2011 2010
Priority Mail 824 790 779
Parcel Select, Parcel Return & Standard Parcels 1,288 1,115 979
Package Services 645 675 657
First-Class Packages 1705 638 599
Express Mail 40 40 43
Total Shipping & Packages Volume 3,502 3,258 3,057
Shipping & Packages Volume *
1 Includes First-Class Mail Parcels and First-Class Package Services.
*Note: The totals for certain mail categories for the prior year have been reclassified to better reflect classifications used in the current year. These reclassifications did not impact
total Shipping & Packages volume for the prior year.