USPS to launch LTL service

The U.S. Postal Service planned to launch less-than-truckload operations on May 6 as part of a test program named "Collaborative Logistics." But it's doubtful that the revenue generated by the service will have much impact on the $38 billionayear U.S. LTL market, analysts say.The service offering, announced April 2 in a filing with the U.S. Postal Rate Commission, cannot go beyond two years unless the commission approves a oneyear extension beyond that. By law, revenues generated from the service cannot exceed $10 million a year, plus inflation, though USPS can seek to have the revenue ceiling raised to $50 million a year. USPS will offer the service on a space-available basis with one- to four-day transit times. It will leverage its existing surface transportation network, and will price the product competitively with other providers. Jon A. Langenfeld, transportation analyst for Robert W. Baird & Co., says that because of the operational demands of competing in the LTL sector, he doesn't see USPS "as a viable nearterm threat to the industry." David Humes, an executive with consultants AFMS Logistics Management Group, says USPS's revenues would barely make a dent in the overall LTL market. "It sounds to me like a plan to use up extra capacity as volumes are down. The question is whether this is a quick fix or a longterm strategy."