WASHINGTON — The financially struggling U.S. Postal Service is revamping its priority mail program to raise revenue and drive new growth in its package delivery business.
The agency is now offering free online tracking for priority mail shipments, free insurance and date-specific delivery so customers know whether a package will arrive in one, two or three days.
Postal officials said Wednesday they expect the changes to generate more than $500 million in new annual revenue. The changes — including redesigned boxes and envelopes — are effective immediately.
The improvements come as the Postal Service is reeling from losses this year totaling $3.9 billion. The agency has been trying to restructure its retail, delivery and mail-processing operations, but says its financial woes will worsen without help from Congress.
The changes to priority mail will help the Postal Service better compete with rivals FedEx and UPS in the increasingly lucrative area of shipping products purchased from online retailers, said Nagisa Manabe, the service’s chief marketing and sales officer.
“We’re looking at strong underlying growth as Americans increasingly shop online,” Manabe said in a conference call with reporters.
Until now, priority mail has been advertised as a 2- to 3-day delivery service, with customers unable to know exactly how long it would take for a parcel to reach its destination. Now, they will know the specific date on which a package will be delivered.
Demand from small business customers also helped persuade the agency to offer free insurance, $50 coverage for most priority mail shipments and $100 coverage for priority mail bulk orders shippers.