The U.S. Postal Service may soon come knocking on your door on Sunday — with packages.
Internet retailing giant Amazon has made a deal with the USPS to start delivery of packages in select cities, with no extra cost for customers of Amazon Prime, the company’s premium level of service.
Amazon and the USPS are rolling out the service in the Los Angeles and New York metro areas first, with a larger national rollout in 2014, starting with cities such as Dallas, Houston, New Orleans and Phoenix. After that, Amazon plans to roll out the service to “a large portion of the U.S. population in 2014,” the company said.
For those living in the first few cities of the Sunday service, “If you’re an Amazon Prime member, you can order a backpack for your child on Friday and be packing it for them Sunday night,” said Dave Clark, Amazon’s vice president of worldwide operations and customer service, in a written statement.
The deal is mutually beneficial to Amazon and the USPS on a number of levels.
For Amazon, the arrangement gives it a big leg up on rival online merchants, as they would be the only company (so far) to be able to deliver packages on Sunday through the USPS. And the announcement comes amid a flurry of holiday-timed projects aimed at helping Amazon cement its leadership in the online sales business.
Amazon has made its “Prime” service the spearhead of many of its most innovative offerings. Prime memberships cost $79 a year, before promotional discounts, and members receive faster shipping on packages, but also access to a library of streaming media, such as TV shows, movies and original Hollywood-style productions. For Amazon customers not in the Prime program, Sunday delivery is offered at no extra cost — so standard shipping rates apply.
Meanwhile, Amazon is beginning work on a massive warehouse in the Ruskin area that will have benefits and drawbacks for customers in Florida. On one hand, deliveries of all sorts may come faster, but Amazon’s construction in Florida also means the company will have a physical presence here and have to collect sales taxes on items.
Competition from Amazon is one reason scores of large, physical store merchants are enhancing their online sales units, including Wal-Mart, BestBuy and Target — offering everything from free shipping to same-day pickup of items in their physical store locations. Amazon Prime customers can see if the Sunday delivery is an option in their city when they put items in their online cart.
For the USPS, the deal offers something of a lifeline as the organization struggles with deepening financial problems. The USPS has already closed thousands of post offices nationwide in a drive to cut costs, and the USPS proposed ending Saturday mail delivery. Congress rejected that plan. Neither the USPS nor Amazon released financial terms of their arrangement.
The holiday season remains a massively important time for the USPS. This year the Postal Service expects to process 545 million pieces of mail every day throughout the holiday season; totaling nearly 15 billion pieces of mail to be delivered between Thanksgiving and New Year’s Eve. Package volume is expected to increase by approximately 12 percent from last year to about 420 million packages during the 2013 holiday season.