*USPS Forms Alliance With DHL

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The U.S. Postal Service, Washington, announced yesterday that it is forming an alliance with DHL Worldwide Express Inc., Redwood City, CA, to jointly offer two-day, documents only service to Western Europe beginning April 12.

The alliance will help the USPS bolster its international mail operations and will help the USP compete with overseas post offices that are becoming increasing aggressive and acquiring private competitors.

"By coupling with a world-class provider, the Postal Servcie gains immediate access to an infrastructure it needs to meet customer demand," said John Kelly, USPS' vice president for its Expedited/Package Services division.

This is the first product the USPS has ever offered to foreign markets that does not go through a foreign postal administration, and the USPS believes this will help to offer better service.

"Currently, it takes International express mail three to seven days to deliver, and there is no tracking and tracing," said Kelly. "And our customers have told us pretty continuously that the service is not good enough, and the information system is not good enough. But, it is very difficult working with a foreign postal administration to provide the necessary levels that the customer demands."

In addition, Kelly said that last year the USPS sent only 800,000 shipments to Europe. (In 1994, the USPS sent 1.2 million shipments.)

Under the plan -- approved on Monday during the monthly USPS Board of Governor's meeting -- USPS customers in Boston, Charlotte, NC, Chicago, Houston, Miami, Minneapolis, New York, Philadelphia, Phoenix, San Francisco, San Jose, and Washington will be able to receive guaranteed two-business day delivery service to 19 countries in Western Europe with day-certain delivery and online track and trace capabilities via DHL's EasyShip systems.

Kelly said the Priority Mail Global Guaranteed service will appeal to small and home-based businesses, and will be competitively priced. A half pound shipment between any two points would cost about $23, which is significantly less than the prices charged by FedEx, for example, which is $25.50, and United Parcel Service of America, which is $27.50.

Kelly said after nine months, the USPS will evaluate the results based on on-time performance and whether or not DHLs' information system meets its customers needs, and then it will decide whether to add new U.S. cities, other international areas, or other DHL products and services. It also will evaluate whether the USPS will offer this service for international-to-US shipments.

Kelly said it will launch a direct mail and media campaign one week to two weeks prior to April 12th.
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