USPS to Dominate Grocery Delivery?
Talk about baking a surprise inside of the cake—the U.S. Postal Service testing grocery delivery in San Francisco was only the outer layer. The surprise inside was how fast USPS wants to start nationwide deliveries to major metropolitan areas. It may happen for retailers of grocery and pre-packaged goods after this next 2-year-long test is complete.
While USPS didn't reveal where this test will be when it starts on Oct. 24—that section of the Sept. 23 notice to the Postal Regulatory Commission (opens as a PDF) was redacted due to the status of "Customized Delivery" as "an experimental competitive product"—the notice to the PRC did say it was possible annual revenue for the 3 to 7 a.m. deliveries may exceed $10 million a year if they prove popular.
"By expanding its carrier services and offering customized delivery, the Postal Service can garner profitable revenue through new revenue streams," the notice reads.
The USPS notice does provide a window into how the AmazonFresh package delivery service works, though. It also mentions one to four totes per address average out to 160 bags a day that USPS delivers in the 38-ZIP-code test area.
"In the current process, the retailer brings groceries already packed into retailer-branded totes, some of which are chilled or include freezer packs, directly into Postal Service destination delivery units (DDUs) between 1:30 a.m. and 2:30 a.m.," the notice reads. "The totes are all the same size and color, and have a QR Code on the outside. The Postal Service receives a manifest file from the retailer containing the address and QR Code number for each tote. This file is used by the Postal Service to dynamically route totes and create a line of travel for each route."
iPhone scanning allows "City Carrier Assistants" to find route information on a USPS app, enabling them to sort totes "on the workroom floor" by route and delivery order before loading them into trucks.
Then the CCAs, wearing postal uniforms and lighted caps, make the deliveries to unattended, customer-designated locations that don't require CCAs to ring the doorbell or knock on the door.
The 2-year-long test will include trials of deliveries at other times of day.
USPS Board Chairman Mickey D. Barnett recently told Congress that package delivery revenues are growing, even as First Class mail volume is on the decline. USPS needs to position itself to capitalize on package delivery revenue, he says.
Meanwhile, FedEx plans to increase the price on many of its products by 4.9 percent on Jan. 5. UPS, which industry watchers also expect to see raise its rates, had no announcements listed as of presstime.
Is increased package delivery the answer for USPS?
Please respond in the comments section below.