USPS submits proposal to market test early morning grocery delivery in certain cities.
The U.S. Postal Service is always looking for fresh ideas to create new revenue streams, and it may have come up with its freshest one yet.
The cash-strapped agency is looking to deliver groceries to homes in select metropolitan areas nationwide, as part of a pilot program it hopes can launch it back into the black. The program, which is pending approval from the Postal Regulatory Commission, would be called Customized Delivery.
USPS would “provide delivery of groceries and other prepackaged goods,” for the most part between 3 a.m. and 7 a.m. Customized Delivery would aim to build on “operational testing” the Postal Service started in conjunction with Amazon earlier this month in San Francisco.
Sue Brennan, a spokeswoman for the Postal Service, said she could not yet elaborate on details of which cities or retail partners would participate. The process would involve a grocery store dropping off already packed, branded totes at post offices between 1:30 a.m. and 2:30 a.m. Customers would need not worry about getting woken up, however. The carriers would simply place the perishable package at a pre-designated spot without ringing the bell or knocking on the door.
The Postal Service said it may try out other delivery windows throughout the day during its market testing.
In the operational testing phase in San Francisco, USPS averaged 160 totes per day at the 38 eligible ZIP codes. USPS asked its regulators for special permission to allow revenues to exceed $10 million annually, but said it has “taken steps to ensure” revenues do not surpass $50 million.
“Customized Delivery is designed to provide retailers with unique delivery windows for groceries and other prepackaged goods, thereby improving the shopping and delivery experience for customers,” the agency wrote in its proposal. “Ultimately, the Postal Service expects this will generate more package deliveries that do not currently move within the postal system. Grocery delivery services are expanding across the nation, with several different types of companies beginning to offer this service in recent months.”
USPS has not yet released its pricing structure for the new venture, but said it would “fall within the price range” currently offered by competitors. PRC has no statutory deadline for issuing its ruling, but generally takes one-to-two months for USPS’ market testing requests. USPS can launch the program as soon as Oct. 24, depending on PRC’s response time.
If approved, the Postal Service plans to continue the test for two years, though it may decide to make the program permanent sooner, or cut the pilot short.
(Image via Ivonne Wierink / Shutterstock.com)
NEXT STORY: The Economic Case For Paternity Leave