United States Postal Service SWOT and PESTLE Analysis

Strength

1. High growth in Shipping and Packages category: The business went through major changes due to the COVID-19 pandemic but the Shipping and Packages category saw historical growth in revenue and volume of sales due to rise of e-commerce. Government orders forced most stores to shut down and they were forced to transition to e-commerce to sustain their business. Consumers also started ordering everything online. The sudden growth in e-commerce services led to growth in the packaging and shipping sector as well. USPS saw a massive increase in shipping volumes and partnerships with several large businesses helped them capitalize on this change. in 2020, Shipping and Packages generated 39% of the total revenue compared to 32% in 2019. Shipping and Packages revenue grew by 25.3% on volume growth for FY20 compared to a growth rate of 18.8% in FY19.

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Weakness

1. Over $87 billion in losses over the last 14 years: The United States Postal Service has been an integral part of the nation’s history. For more than 240 they have delivered almost half the global volume of mail and packages to more than 160 million locations across the country. However, for the last fourteen years, USPS has been suffering from losses in its business and the total loss has amounted to $87 billion. This poor financial performance reflects on the unsustainability of the business model. One of the cardinal reasons for this failure is the tectonic market shift away from mails and post office services and USPS’ failure to capitalize on that shift. Other companies like FedEx and UPS shifted along with the market and expanded their range of services to meet emerging needs and they are performing better with justifiable higher prices and higher profits. USPS on the other hand decided not to shift its focus on to other areas and it focused on cost-efficiency while neglecting external factors. The COVID-19 pandemic once again proved that the shift to e-commerce is inevitable and whichever company does it quicker and more efficiently will emerge victorious.

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Opportunity

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Threat

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Political

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Economic

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Social

1. Ease of sending emails has reduced demand for postal services: The internet revolution that swept the world in 2000 has quickly become bad news for the postal service industry. Consumers are shifting away from physical letters and mails and moving onto the more convenient digital methods of emails. Not only are emails convenient but they are also cheaper and with computers becoming commonplace, almost everyone in the developed countries has access to a computer and can read and send emails. In 1980s when fax machines first arrived, they were a huge threat to postal services. Fax machines were cheaper and used telephone network to transmit messages. In 1989, when the world wide web was invented, the importance of the telephone network grew even more and soon email was born. The US Postal Services has seen steady losses over the past fourteen years primarily due to this demographic shift towards emails and text messages. They have failed to keep up with the rapidly changing environment.

Technological

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Legal

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Environmental

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