June 22, 2015

USPS to Delivery Groceries in NYC

Author: Judy Wolf

The U.S. Postal Service filed a statement with the Postal Regulatory Commission on Thursday saying it “intends to expand the Customized Delivery market test to the New York City metropolitan area, on or shortly after June 29, 2015.” The USPS market test of grocery delivery on behalf of Amazon started last fall in the San Francisco area and spread to San Diego early this year.

Amazon’s “AmazonFresh” delivery service is already available in parts of New York City, with a fast-delivery promise: “Place your order by 10am and have it by dinner, or by 10pm and have it by breakfast.” And it already has an apparent pricing advantage in the Big Apple, undercharging three rival grocery-delivery ventures by at least 17%, according to a Nomura Securities International study.

The Postal Service will presumably take on some of those early-morning deliveries. It has told the PRC that its market test involves having non-career city carrier assistants deliver to a customer-designated location between 3 a.m. and 7 a.m. “without disturbing the recipient.”

The agency is already testing or about to test other rapid-delivery services in New York involving fresh fish, bottled water, and cut flowers.

Despite some objections about unfair competition with private enterprise, the PRC in October authorized a two-year test of Customized Delivery. But it has not acted on the Postal Service’s request to remove a $10 million annual revenue cap on the program.

 

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