Survey: Shippers Seek Alternatives to Priority Mail

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Shippers continue to divert parcel volume from the U.S. Postal Service's Priority Mail to rivals United Parcel Service and FedEx, according to a survey of major shippers from Bear, Stearns & Co. released this week.


Those responding to the Supply Chain Indicator-Third Quarter 2002 Shipper Survey said they would move 17 percent of Priority Mail volume, up from 11 percent in the company's second-quarter survey, to other carriers as a result of Priority Mail's recent switch to distance-based pricing and rate increases.


The survey also found that UPS shippers who diverted volume to other carriers because of the possibility of a strike by Teamsters this summer returned 68 percent of that volume to UPS as of mid-November.


Results also showed that 72 percent of business permanently redirected away from UPS went to FedEx. The 72 percent consists of 40 percent switching to FedEx Ground and 32 percent moving to FedEx Air.


The third-quarter survey was sent to more than 1,000 shippers from various-sized companies and verticals, and Bear Stearns received 65 completed questionnaires. The group of respondents was dominated by shippers with transportation budgets in excess of $25 million.


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