It’s no surprise the economy is going through a massive correction. Inflation rates are at 40-year highs, mortgage rates have more than doubled this year, and the national gasoline average is over $5.00 per gallon for the first time. Now is the time for business owners to be clamping down to save on costs as sales for ecommerce and subscription brands are also slowing rather dramatically. One of the biggest cost centers is always a brand’s shipping expense. The best way for shippers to save money with a reliable service is to use a Postal Consolidator. A Postal Consolidator can save you massive amounts of money if you are fine with a little bit slower delivery service. In this piece we will define what a Postal Consolidator is, talk about a few of the key players, and confirm why this is a suitable option for most shippers.
What is a Postal Consolidator?
A Postal Consolidator is a company that partners directly with USPS to provide a shared delivery experience at deeply discounted shipping rates. The consolidator actually owns the relationship with the shipper. They are the go-to contact for pricing and service issues (not USPS direct). The consolidator’s portion of this shared service is the pick up from the shipper, the transport to the consolidator’s distribution centers, the break out and national linehaul to drop off at USPS locations across the country. USPS’ part is to then just do the final mile delivery to your mailbox or front porch. Here is a depiction on how UPS SurePost works. It is virtually identical for all consolidators.
Why Does a Consolidator Relationship Work So Well?
These ‘shared transportation’ relationships are mutually beneficial for both companies: the consolidator has the linehaul network to do the pick up and cross country transportation and USPS is already contractually obligated to deliver to every U.S. address six days a week (seven days is common in many areas). USPS is best when hyper local. Since both companies (consolidator & USPS) are doing what they are good at it they are avoiding the more costly areas of the operation, respectively. Their costs goes down which means the cost for the service goes down dramatically.
Who Are Some Key Player Consolidators?
There are many consolidators out there. Some common names are OSM Worldwide, Pitney Bowes, Global Post & RR Donnelly. UPS even has their own consolidator service called SurePost. FedEx had a competing service called SmartPost, but just recently moved this offering all in-house and rebranded to FedEx Ground Economy
These consolidators are picking up millions of packages per day. The process is tested daily and the results are usually good enough to warrant using the services. Typically, a consolidator service will add 1-3 day of transit. Some are better as they have preferential treatment from USPS when they drop off packages.
Are Postal Consolidators Right For Me?
Unless you have a time sensitive product that is required to be in hands in 1-2 days, almost everyone could benefit from a consolidator relationship. The savings can be $1-4 per package when using a consolidator vs. using USPS, UPS, or FedEx direct. There are also no bogus accessorial charges when using most consolidators. At Lessgistics, we partner with Global Post and we have set rates for the year. No fuel surcharge (UPS and FedEx is currently >20%!), no residential delivery fees, and no delivery area surcharges. Very simple and straightforward pricing is a key component of using a consolidator.
Now, not everyone can use a consolidator direct as it does require a good bit of volume. Usually, consolidators want to pick up from shippers that have at least 300-500 packages per day (this equates to 2-3 gaylords full of packages). Also, cumulative volume throughout the month is beneficial to getting a most favorable rate structure.
At Lessgistics, since we are shipping thousands of boxes across many different pick up dates we have tremendously aggressive rates. Reach out to us today to get your free rate quote same day. We guarantee we can save you money on shipping!