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The new USPS reform bill could shake up supply chains | Supply Chain Dive

Tracey believes if the USPS were allowed “more dynamic pricing flexibility as a market participant,” then the USPS might be able to turn a profit. But big changes to how the USPS operates would affect supply chains. Some companies may have to rearrange supply chains or absorb higher costs if USPS shipping rates increase or if rules and regulations regarding differently sized packages change.

“The downside to that is there are mandates on the certain services the USPS is allowed to provide,” Tracey said. “So there are some cases where they have to provide services where they lose money, because they’re mandated by law. So you have pricing limitations pushing the price per unit down. That math equation could be fixed by changing the price equation and changing the cost structure. Managers hands in this situation are tied, because they can only do what they’re mandated by law.”

For now, the bill freezes rate increases, so while the USPS overhauls operations, supply chains and consumers won’t have to worry about more expensive packages. But going forward, supply chains and specifically 3PLs may need to pay attention to how the USPS is reformed, because even subtle changes to its operations will likely have ripple effects throughout the shipping industry.

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The new USPS reform bill could shake up supply chains | Supply Chain Dive.

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