Cash-strapped post office tests same-day delivery

Associated Press Modified: November 23, 2012 at 8:30 am •  Published: November 23, 2012
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As the Postal Service launches Metro Post and sets pricing, its target consumer is likely to include busy professionals such as Victoria Kuohung, 43. A dermatologist and mother of three young children, Kuohung for years has gone online for virtually all her family's needs, including facial cleansers, books, clothing, toys, diapers and cookware.

Kuohung lives in a downtown Boston high-rise apartment with her husband, who often travels out of town for work. The couple says they would welcome having more retailers offer same-day delivery as an option. Still, at an estimated $10 price, Kuohung acknowledges that she would likely opt to wait an extra day or two for delivery, unless her purchase were a higher-priced electronics gadget or a special toy or gift for her son's birthday.

"I prefer not to spend my time driving in a car, fighting for parking, worrying about the kids, dealing with traffic and battling crowds for a limited selection in stores," said Kuohung, as her 1-year-old-twins and 4-year-old son squealed in the background. "But right now Amazon delivers in two days since I'm a member of Prime, so it would have to be something I can't get at the corner CVS or the grocery store down the street."

Under the plan, the Postal Service is working out agreements with at least eight and as many as 10 national retail chains for same-day delivery. The mail agency says nondisclosure agreements don't allow it to reveal the companies. But given the somewhat limited pool of large-scale retailers — they must have a physical presence in 10 or more big U.S. cities to be a postal partner — the list is expected to include department stores, sellers of general merchandise, clothiers, even perhaps a major e-commerce company or two.

Consumers will have until 2 or 3 p.m. to place an online order with a participating retailer, clicking the box that says "same-day delivery" and making the payment. Postal workers then pick up the merchandise from nearby retail stores or warehouses for delivery to homes between 4 and 8 p.m. that day. In San Francisco, the post office will closely track work hours and travel, which could quickly add to costs depending on traffic, total package volume or the proximity of merchandise in a delivery area.

"We're trying to revolutionize shipping; we're not simply trying to get a niche market of consumers," said Gary Reblin, the Postal Service's vice president for domestic products. He believes people of varying ages and income levels — young adults who don't own cars, older Americans who are less mobile — will welcome avoiding costly or time-consuming trips to the store.

By targeting big partners, Reblin said, the post office eventually hopes to push pricing down by making same-day delivery a standard option on retail web sites.

The new same-day offering is part of the post office's blossoming shipping and packaging business. That sector was one bright spot in the mail agency's dismal 2012 financial report, which showed a loss of $15.9 billion and forecast more red ink next year

This holiday season, the post office expects a 20 percent jump in its package volume, higher than its shipping rivals.

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