5:45pm

Mon November 11, 2013
Business

Race For Same-Day Delivery Could Be Boon For Cash-Strapped USPS

Originally published on Mon November 11, 2013 5:52 pm

Transcript

AUDIE CORNISH, HOST:

While large-scale government IT contracts have a terrible track record, Amazon is a company that has made its reputation for delivering on time. And it's always looking for more ways to shorten the time between online ordering and delivery. Well, today, Amazon announced it's partnering with U.S. Postal Service to expand Sunday delivery options.

NPR's Jim Zarroli reports that for the financially strapped Postal Service it's an opportunity to take a bigger role in the lucrative online retailing market.

JIM ZARROLI, BYLINE: Amazon says it will begin delivering packages on Sundays in the New York and Los Angeles areas this week, and it will expand to other regions starting next year.

KELLY CHEESEMAN: Adding an additional day of delivery means that every day is Amazon delivery day.

ZARROLI: Amazon spokesperson Kelly Cheeseman says the new service means customers will be able to order something Friday afternoon and receive it Sunday morning. And she says Sunday delivery won't be any more expensive than any other day - right now it costs extra. The company now uses a variety of shippers to deliver merchandise, but Cheeseman says when it came time to begin Sunday deliveries it made sense to sign a contract with the Postal Service.

CHEESEMAN: They have more than 200 years of experience delivering to customers. So we know that they will be ready to rollout Sunday delivery to Amazon customers.

ZARROLI: The contract comes at a time when the U.S. Postal Service is losing huge amounts of money - more than $16 billion last year alone. Largely because of the Internet people don't send as much first-class mail as they used to, so its revenue has dropped dramatically.

Rick Geddes is an associate professor of Policy Analysis and Management at Cornell University.

RICK GEDDES CORNELL UNIVERSITY PROFESSOR,: They're looking for every dime of either new revenue or cost savings that they can find, while still, you know, doing what Congress tells them they have to do which is deliver the mail, you know, six days a week to every address.

ZARROLI: Post office officials proposed ending Saturday deliveries as a way to save money, but that idea was shot down by Congress. Geddes says lately the system has been looking for new ways to make money. For instance, it recently announced a pilot program setting up postal windows in Staples outlets in the San Francisco area. Geddes says measures like these are a step in the right direction. But he says they're not enough by themselves to solve the huge problems the system faces.

PROFESSOR,: The fundamental economic challenges that the Postal Service is facing are much deeper. But I applaud heartily this type of a partnership.

ZARROLI: If nothing else, the Amazon deal will give the Postal Service a bigger foothold in the online retail business, one it hopes it can expand as time goes on.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.