The U.S. Postal Service is about to join the ranks of online shoppers.
Under a three-month agreement with FreeMarkets Inc. announced Monday, the USPS will use the Pittsburgh, PA-based firm’s B2B eMarketplace online auction site to buy an array of services, ranging from tractor-trailer leases and fuel to printed envelopes.
The agreement with the USPS is the first of its type between FreeMarkets and any agency of the federal government, according to David McCormick, vice president, public sector.
For a monthly fee, the USPS, like other FreeMarkets clients, will indicate what goods and services it’s looking for and the maximum price it will pay. Suppliers plugged into the firm’s Web site will then compete for a contract to fulfill the request.
Last year the firm, which claims to save clients between 2% and 25% on purchases, auctioned off goods and services worth more than $2.7 billion.
Postal officials would not indicate the total amount of money they expected to save by buying goods and services over an online auction site.
But spokesman Gerry Kreienkamp said the USPS expected to shave between $3 million and $4 million off the $35 million it spends annual to rent tractor-trailer trucks to transport mail to and from various locations nationwide.
Although it has ended the last four fiscal years in the black – posting surpluses in excess of $5 billion since 1995- the USPS anticipating a meager surplus of between $50 and $100 million for fiscal 2000, is under orders from Postmaster General William J. Henderson to cut costs by some $500 million.
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