Executive Briefings

Post Office to Try Out Same-Day Parcel Delivery in San Francisco

Emboldened by rapid growth in e-commerce shipping, the cash-strapped U.S. Postal Service is moving aggressively this holiday season to start a premium service for the internet shopper seeking the instant gratification of a store purchase: same-day package delivery.

Teaming with major retailers, the post office will begin the expedited service Dec. 12 in San Francisco at a price similar to its competitors. If things run smoothly, the program will quickly expand next year to other big cities such as Boston, Chicago and New York. It follows similar efforts by EBay Inc., Amazon.com Inc. and most recently Wal-Mart Stores Inc., which charges a $10 flat rate for same-day delivery.

The delivery program, called Metro Post, seeks to build on the post office's double-digit growth in package volume to help offset steady declines in first-class and standard mail. Operating as a limited experiment for the next year, it is projected to generate $10m to $50m in new revenue from deliveries in San Francisco alone, according to postal regulatory filings, or as much as $500m if expanded to 10 cities.

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Teaming with major retailers, the post office will begin the expedited service Dec. 12 in San Francisco at a price similar to its competitors. If things run smoothly, the program will quickly expand next year to other big cities such as Boston, Chicago and New York. It follows similar efforts by EBay Inc., Amazon.com Inc. and most recently Wal-Mart Stores Inc., which charges a $10 flat rate for same-day delivery.

The delivery program, called Metro Post, seeks to build on the post office's double-digit growth in package volume to help offset steady declines in first-class and standard mail. Operating as a limited experiment for the next year, it is projected to generate $10m to $50m in new revenue from deliveries in San Francisco alone, according to postal regulatory filings, or as much as $500m if expanded to 10 cities.

Read Full Article