USPS Adding 45 New Distribution Centers To Handle Holiday Crush
Although the holiday shopping season has already begun, the U.S. Postal Service is jumping into the fray of the logistics nightmare that has befallen the country.
The USPS is securing and opening 45 new distribution centers on short-term leases with the goal of significantly increasing its package delivery capacity for this holiday season, The Wall Street Journal reports. The quasi-governmental agency is also in the process of adding 112 new sorting machines and 40,000 seasonal workers, though USPS' progress in reaching its hiring and space goals wasn't disclosed.
After he came under fire for attempting to take dozens of mail sorting machines down ahead of the 2020 presidential election, Postmaster General Louis DeJoy also presided over a holiday season in which USPS delivered around 17% of its packages late, compared to just over 10% for FedEx and 5% for UPS, according to ShipMatrix data reported by the WSJ.
DeJoy, speaking at a 200K SF distribution center in the suburbs of Pittsburgh that USPS leased for a three-year term, chalked up the delays to the agency only finalizing its seasonal ramp-up plans in October, the WSJ reports. This year, USPS had its holiday projections in hand by February and has spent the rest of the year putting it into practice.
The percentage of packages USPS delivered on time has risen sharply over the first three quarters of this year, peaking in Q3 when it delivered about 97% of packages on time, besting both UPS and FedEx, according to ShipMatrix data reported by the WSJ.
DeJoy, who said the USPS' capacity-building initiative is on schedule, said that the postal service will be able to deliver about 50 million packages per day over the holiday season, a 35% increase from last year, the WSJ reports. He also indicated that like the Pittsburgh-area warehouse, the facilities USPS leases will be able to serve some distribution function even before equipment is fully moved in.
Should USPS still need to lease or buy any of the 45 distribution centers it is targeting, it will be during the most competitive market for warehouse space of all time. Similarly, its planned hiring surge is one of millions of seasonal jobs that retailers and logistics companies have been attempting to fill this season, with relatively little success.
The agency's ability to fulfill its on-time promises also depends on the situation at major U.S. ports improving, as perhaps the biggest current stumbling block for the supply chain is the backup in getting shipping containers off barges and onto trucks.
