Remember earlier this year when the U.S. Postal Service put a plan forward that would have cut mail deliveries on Saturdays? But the plan to cut Saturday postal deliveries was eventually taken back due to public backlash. It kept parcel package delivery going on the weekend.
Well, it now seems to have worked out for the best, as Amazon announced recently that it has teamed up with the U.S. Postal Service to offer parcel shipping to select Amazon Prime customers on Sundays.
In a release from the online retailer announcing the new service, Postmaster General and Postal Service CEO Patrick R. Donahue explained:
“As online shopping continues to increase, the Postal Service is very happy to offer shippers like Amazon the option of having packages delivered on Sunday. With this new service, the Postal Service is now delivering packages seven days a week in select cities.”
Service Limited to New York and LA for Now
The new service is being offered only in New York and Los Angeles at first. However, a roll-out next year is planned for other major cities in the U.S., including Dallas, Houston, New Orleans and Phoenix.
Millions of products will be eligible for Sunday delivery to Amazon.com’s Prime customers who receive free two-day delivery just for their membership. The new service means Amazon Prime customers who order a product Friday won’t need to wait until Monday to receive it. When checking out after making an order, members will simply see the Sunday delivery notification if applicable in their area.
The new arrangement would seem to be a shot in the arm for the Postal Service as it struggles to remain viable and competitive against private rivals UPS and FedEx.
But it’s also another step in Amazon’s efforts to become an ever more viable competitor to traditional offline shopping options. Sunday delivery is also good news for small businesses that work with Amazon as a major means of selling their products and for affiliate marketers who offer links to Amazon goods on their sites.
Many other small businesses still use the U.S. Postal Service for their own deliveries as the only means to reliably reach every address in the nation. These small businesses won’t be able to get their packages delivered on Sundays.
Delivery Trucks Photo via Shutterstock
Sagar Rai
I think this is not for everyone. The deal likely has been specially discussed for Amazon, which likely assurances Sunday enterprise in specific zip codes.
WOW! I am super excited about this (and impatiently wait for it to hit my city). Is it sustainable? Not sure. A lot of what Amazon is doing doesn’t seem sustainable in the long run, but if it can kill off every competitor I guess it’s worth it in the end.
If the U.S. Postal Service is struggling and was looking to cut postal deliveries on Saturdays, but is agreeing with Amazon to deliver packages on Sundays, then Amazon must have made it worth its while.
Parkerthon
Very intriguing. I think it’s absolutely sustainable if they didn’t underestimate their costs. The USPS is offering Sunday delivery which is something UPS does not which for the first time in a long time is giving them a first to market competitive advantage over UPS and FedEx. What’s even more surprising is that the postal workers union is willing to work Sundays now. Sounds like this was a deal that actually saved their butts. However whether USPS and Amazon both profit from this and how much remains to be seen.
FYI this service is now being offered in Cincinnati.
Anita Campbell
I am going to take a contrarian view here. As a taxpayer I am aggravated by this news.
Earlier this year we were being threatened with the loss of Saturday mail delivery. But one retailer steps up and suddenly the Post Office is actually EXPANDING delivery now to Sunday?
Something about this just isn’t right. My question is, how much does the U.S. taxpayer have to subsidize this? This is cronyism at its worst.
Also, I am not sure this is good for business in general. It feels like Amazon has “bought” the USPS.
– Anita
Anita,
Just like Ebele has said above, I think Amazon’s offer must be substantial…
Anita Campbell
Hi Ivan, Maybe. But then again, maybe not.
The USPS is a quasi-governmental entity. It’s supposed to be run at a profit like a business. But it also serves a public purpose — to have a reliable postal system for all (not some — but ALL). And so it is subject to Federal law. It has to balance its profits with its obligations to the American public.
The problem is if they play a shell game. They move money around here and there. And then later they come along and say “we’re losing money so we need to cut out this service or that service for the American public.” Pretty soon they will want to cherry pick services — instead of not discriminating, as they are obligated by law not to do, they just want to provide service here or there as they choose.
You see, it may not be easy to tell how much the USPS is really making from deals like this. This expense or that expense can be unfairly weighted either positively or negatively — you’re a business owner so you know very well that apportioning expenses in accounting is often a judgment call or based on logic that may not be justifiable.
Maybe this deal will pass scrutiny and turn out to be the best thing that ever happened to the post office.
But real trust was lost earlier this year when the USPS attempted to cut out Saturday delivery. And that causes me to want to learn much more about a deal like this before touting how wonderful it is.
– Anita
Pat
The USPS isn’t subsidized with tax dollars. They are self funded through their own revenue. So it costs you as a taxpayer nothing.
Anita Campbell
Hi Pat, you make a fair point if you are talking about direct taxation — and in that respect I can only agree with you.
However, I don’t think I stated my comment very well (I was in a hurry). So let me clarify. If you look at the bigger broader picture, when private enterprises get sweetheart deals from the USPS, unfortunately too often the American taxpayer loses. Because then we’re threatened with less service, closed post offices and so on — while the USPS does something for a single company. For instance, you end up with situations like this one — which stink.
The American taxpayer ends up losing. We are inconvenienced — even threatened with the loss of Saturday delivery. And we have to deal with cut hours, fewer offices and longer lines, along with surly USPS employees who feel they are not being treated fairly. And ultimately we have to pay for higher postage.
In effect, we the people can end up subsidizing special deals, while billionaires get richer.
That said, I was raising more of an open question. I don’t know the particulars about this deal and whether it is truly profitable enough on a stand alone basis that the taxpayer won’t have to — in some other way — foot the bill. It’s just that the attempt to cut out Saturday delivery has got me questioning everything now.
Anita
John
None of the taxpayers money goes to the USPS.
Anita Campbell
I understand that. But I’m not drinking the kool-aid of the Amazon deal just yet. 🙂
As I clarified above, the American public can still suffer when sweetheart deals are made, because then we’re threatened with the loss of service because supposedly the USPS is losing money. Yet one retailer gets special treatment. How’s that right? My point is, there’s something that stinks when you make a deal with a single retailer to add Sunday delivery, just a few months after you were crying about needing to stop Saturday delivery for the American public.
John, you might read this: http://savethepostoffice.com/mysteries-amazon-deal-why-postal-service-skimming-cream-sundays