FedEx to use USPS service for return-to-retailer packages

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FedEx and the US Postal Service have partnered to allow FedEx customers to send packages back to retailers this holiday season via the USPS' Parcel Return Service. The agreement takes place as the agency attempts to diversify its revenue stream.

The agreement, which went into effect September 10, affects packages sent through FedEx's SmartPost service that are being returned to merchants and retailers. Consumers can use Postal Service collection boxes, branches, and home or business pickup.

The service will initially aid retailers with large volumes of returns, which will include a prepaid label in the original shipment along with return instructions. The packages will be consolidated into shipments at post offices and then picked up by FedEx for return to the retailer.

“It means that we are offering a way for our customers — retailers and catalogers — to provide a simple way for customers to return merchandise when needed,” said David Westrick, FedEx ground spokesman.

The Postal Service is considering closing hundreds of branches amid the recession and dwindling mail volumes. The agency has predicted that this year's mail volume will be as many as 20 billion pieces smaller than last year's.

Jim Cochrane, VP of ground shipping for the Postal Service, said that the agency is seeking to “diversify our revenues.”

“Mail is our core business, but so is shipping,” he said. “We are looking to replace some of that and show growth in the shipping business.”

Cochrane added that the prevalence of e-commerce has increased both the need for product shipping and return service.

 “Sometimes with that online shopper, the product comes and the touch or the type or the color is not right,” he said. “Returns really go up, as opposed to store purchasing.”

Cochrane added that the agreement is open-ended and not on a contractual basis. He would not speculate on how much revenue the Postal Service will gain from the agreement. The USPS has agreements with other shipping providers as well, he said.

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