Mon November 11, 2013
Amazon Taps Post Office For Sunday Deliveries; A Win-Win?
Much of the talk in recent years about how the U.S. Postal Service could stem its huge losses has been about the things it might stop doing — most notably, delivering the mail on Saturdays (something Congress won't let it discontinue).
Now, as we reported earlier, there's word that Amazon.com has struck a deal with the Postal Service for Sunday delivery of packages. The service begins immediately in the Los Angeles and New York City metropolitan areas and is planned to expand next year to other metros, including Dallas, Houston, New Orleans and Phoenix.
The early analyses of the deal say it's a winner for both sides.
For the Postal Service, notes The New York Times, the deal offers "a chance to take some business from United Parcel Service and FedEx, which do not deliver on Sundays. Now, some orders that would have been handled by either of those carriers for Monday delivery will go through the Postal Service and arrive on Sunday."
Package delivery is a profitable part of the Postal Service's business, unlike money-losing delivery of Saturday mail.
According to The Washington Post, the Postal Service will deliver the packages "at regular rates. ... Previously, a shipper had to use its pricey Express Mail service and pay an extra fee for Sunday delivery." The Postal Service, adds the Post, "said it would increase staffing in the locations where Amazon will offer the service, but did not offer specific numbers. ... [It] also declined to comment on how much additional revenue the new initiative is expected to bring."
Amazon, meanwhile, "won't change shipping prices for customers" who want Sunday delivery, Bloomberg News says.
But the online shopping giant "is seeking to siphon away customers from Target Corp. and other retailers," Bloomberg adds, at a time when it is "also facing competition from online-shopping sites that are rolling out new services to get products to customers more quickly and efficiently. EBay Inc. offers deliveries under an hour, seven days a week, for some products, and Wal-Mart Stores Inc. operates a same-day delivery service for groceries and household goods."
Beyond the issue of what it means for both sides of the deal, we have a question.