The U.S. Postal Service is asking federal regulators to approve a two-year test of USPS delivery of “groceries and other prepackaged goods” in the early morning hours in big cities across the country, expanding beyond an initial test the Postal Service has been conducting with Amazon Fresh in San Francisco.
The filing yesterday with the Postal Regulatory Commission says that the expanded grocery delivery service could bring in more than $10 million in annual revenue for the Postal Service, but not more than $50 million per year. It’s part of a broader attempt by the USPS to diversify its business.
“Grocery delivery services are expanding across the nation, with businesses ranging from the nation’s largest retailers, to niche operators, to the popular car service Uber entering the marketplace,” reads the filing.
It continues, “With its operational reach, the Postal Service has an opportunity to provide retailers a nationwide solution that offers a trained workforce and the trust and reliability of the Postal Service brand. By expanding its carrier services and offering customized delivery, the Postal Service can garner profitable revenue through new revenue streams.”
The filing, reported earlier today by the Wall Street Journal, is partially redacted to exclude pricing details, but it includes a detailed description of the initial “operational testing” with Amazon, without referencing the company by name. Here’s an excerpt.
Recently, the Postal Service began conducting operational testing for early morning grocery delivery. 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 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
City Carrier Assistants (CCAs) scan totes using iPhone scanning, which provides route order information via a USPS-developed iOS application. The totes are sorted on the workroom floor by route and delivery order, and are then back-loaded to a truck for delivery. Deliveries occur from 3 a.m. to 7 a.m. These deliveries are unattended — the CCA will not ring the doorbell or knock on the door. The carrier places the totes in a location designated by the consumer for delivery. Totes are scanned at key steps in the process to provide tracking and visibility through to delivery. CCAs wear postal uniforms and lighted caps as a safety measure and for easy recognition by the public.
During the operations test, deliveries have been averaging 1 to 4 totes peraddress with an average of 160 totes per day for the 38 ZIP Codes included in the testing. Through this two-year market test, the Postal Service seeks to test and develop a long-term, scalable solution to enable expansion of customized delivery to additional major metropolitan markets across the nation. The Postal Service may also seek to test other possible delivery windows throughout the day, as part of this market test.
This is part of a broader partnership between Amazon and the USPS that also includes Sunday package delivery.
