USPS launches same-day
service pilot
go figure …
60%
The percentage of truckload and logistics giant
Schneider National’s 2011 loads that moved 500 miles
or less. In 2008, that figure was 5 percent.
The U.S. Postal Service (USPS) said florist and gift shop
giant 1-800-Flowers.com became the launch customer for
the USPS’s same-day delivery service, which started Dec.
20 in pilot form in San Francisco.
The service, called “Metropost,” will run in test mode
for a year and only in a 49-mile radius in and around San
Francisco. After that time, USPS can apply to expand its
scope or kill the service altogether if demand doesn’t meet
expectations.
Based in Carle Place, N. Y., 1-800-Flowers.com will use the
service to offer same-day deliveries of foods, gift baskets, and
towers, USPS said in a statement. 1-800-Flowers.com has
offered same-day floral deliveries since its founding in 1976.
John G. Friess, a USPS spokesman, said more companies
are preparing to sign up for the program.
No more than 10 e-commerce companies can participate
in the pilot. Each participant must have at least 10 physical
locations of some type nationwide, with one or more in the
San Francisco area.
Users must live within the area designated for delivery.
Cutoff times for orders are between 2 and 3 p.m., with
packages to be picked up after 3 p.m. and delivered between
4 p.m. and 8 p.m. USPS has developed a separate delivery
network dedicated to the implementation.
Friess said USPS does not set the parameters
of the market test but is instead required to
comply with laws governing a service rollout.
USPS has said the pilot period will give it time
to determine the service’s viability and to adjust
its pricing as market conditions warrant.
Friess would not comment on specific
USPS pricing for the service, though he said
the agency has created one rate scheme for
packages under 25 pounds and another for
packages weighing more than that. It will be up to the participant to determine how it would pass on its shipping
costs to the end customer. The maximum weight that can
be shipped under the service is 150 pounds.
Demand for same-day service will be largely influenced
by customers’ willingness to pay the market price for the
convenience of instant deliveries, or to pay anything at all.
Businesses and consumers have been conditioned to receive
free shipping for their online orders, and research has
shown that many e-commerce transactions are not consummated if there is a cost to ship.
SOURCE: COMPAN Y DATA
PHOTO COURTES Y OF 1-800-FLO WERS. COM
BIG POTENTIAL
The USPS rollout comes amid a flurry of activity in a deliv-
ery segment that is long on potential but short on metrics.
Because market demand for same-day service has not been
fully vetted, no one knows if there is enough long-term
interest to motivate providers to build or refine supply
chain infrastructures and then charge the premium prices
required to cover their costs.
