Nov. 21 (Bloomberg) -- The U.S. Postal Service is vying to fill the void left by the exit of Deutsche Post AG's DHL Worldwide Express from the U.S. overnight-delivery market, Shipping and Mailing Division President Robert Bernstock said.

The service will begin running ads in major newspapers, including the Wall Street Journal, beginning Nov. 21, Bernstock said. Officials want to capture about $300 million of the market.

The Postal Service competes with FedEx Corp. and United Parcel Service Inc., both positioned to broaden their combined 80 percent share of the U.S. package delivery market, analysts with Sewickley, Pennsylvania-based SJ Consulting Group said last week.

``We expect more growth from shipping products than mailing products,'' Bernstock said in Washington Nov. 19. The former Scotts Miracle Gro Co. president spoke with reporters before a meeting of the agency's Mailers Technical Advisory Committee.

The Postal Service reported a $2.8 billion loss for the year ended Sept. 30 and expects the global economic slump to cut further into mail volume, which fell 4.5 percent. First-class mail, formerly a key revenue generator, has fallen 6 percent between 2002 and 2007 and is expected to keep falling.

Bernstock said the agency must focus more on shipping services to position itself for the future. He's also pushing for investments in consumer-driven technologies that he says will help customers access on the Web 85 percent of the services provided at the agency's 37,000 retail outlets. That includes printing shipping labels and stamps.

Shipping products, which aren't subject to pricing caps, made up about 10 percent of revenue last year, the agency said. Services include Express Mail, Priority Mail, Parcel Select, Parcel Return Service, Global Express Guaranteed, Express Mail International, Priority Mail International, International Surface Airlift, and International Priority Airmail.

Bernstock was appointed to the division in July. The unit merged the agency's product management, development and commercial sales units, which is responsible for more than $70 billion in annual revenue.

To contact the reporter on this story: Joi Preciphs in Washington at jpreciphs1@bloomberg.net.

Last Updated: November 21, 2008 16:06 EST