Postal Service To Offer Same-Day Delivery
Will it help the suffering government agency or will people just go with FedEx and UPS?
Monday, November 5, 2012
For the past few years, it has been heavily reported just how bad the U.S. Postal Service (USPS) is doing. Besides losing business to UPS and FedEx, the post office has been steadily losing first-class business -- its most profitable -- to email and the Web.
There's not much USPS can do about email but it is trying to get a leg up on UPS and FedEx by offering same-day delivery service, called Metro Post, being rolled out on a test basis in the San Francisco area by Nov. 12.
E-commerce companies in other states will be able to use the service, but they must have at least 10 physical locations, with at least one location being in the Metro Post test market. Initially, the service will be offered only to commercial customers, though if it's successful it may be extended to individuals.
3 p.m. deadline
In order to deliver a package on the same day it's shipped , the post office will have to get the request from the company between 2:00 and 3:00 pm that day. Although the USPS hasn’t said it will spruce up its tracking system, one would think it would have to in order to make sure the same-day delivery service operates smoothly for both company and consumer.
Its rather primitive tracking system is seen by many critics as one reason USPS lags its rivals in the package delivery business.
Post office officials say the test period will not exceed 24 months, and it’s expected to generate revenues somewhere in the neighborhood of $10 million each year.
The cost to customers will be able the same as UPS and FedEx, we're told. Currently, USPS parcel delivery is considerably cheaper than its commercial vendors.
The USPS has been making huge efforts to improve its package delivery system with a string of recent commercials starring a delivery guy who tells consumers that the post office is just as trustworthy as parcel delivery companies.
The TV ads also highlight the post office’s “If it fits it ships” campaign, trying to further convince consumers that using the agency for package delivery is cheaper and easier than going with other options.
USPS spokesperson Susan McGowan said the new same-day delivery service will provide more delivery options for the consumer, and give the post office a much needed lift in the area of both finances and being considered a trustworthy delivery option.
“E-commerce is just growing, and this kind of a product improves the shopping experience for everyone,” she said in an interview with Bloomberg. “This helps us achieve our goals of enhancing our package business and giving customers better access and better service.”
In petitioning the postal regulatory commission the USPS said the same-day delivery service is far different from any of its other current services and believes once tested and tweaked, it could positively impact the entire nation when it comes to receiving their shipments.
“The Postal Service has not offered a same-day, local delivery product in the past two years,” said the government agency in its written statement to the postal regulatory commission.
“Additionally, the Metro Post delivery service will feature a unique relationship with qualifying online e-commerce companies and their associated retailers, which is unlike any other service offering currently provided by the postal service. The postal service believes these differences to be significant and worthy of testing in the marketplace.”
Same-day delivery is sort of the Big Idea of the Moment in retailing. Amazon has been working towards offering same-day delivery in major markets and a number of retailers, including Walmart, are testing the concept.