Will the Postal Service add fruits and veggies to its daily deliveries?

Discussion
Sep 08, 2014

The United States Postal Service (USPS) is making fresh food deliveries for Amazon in San Francisco as part of a two-month test.

The deliveries, which started in the first week of August, are being made between 3 a.m. and 7 a.m. when most postal trucks are not in use. Amazon’s insulated delivery bags assure that USPS won’t have to run refrigerated trucks for perishable food.

For USPS, the test comes as the cash-strapped federal agency recently won approval to slash prices to better compete for package delivery with UPS and Federal Express. USPS, according to Internet Retailer, said in an e-mailed statement that the test will "determine if delivering groceries to residential and business addresses would be feasible from an operations standpoint and could be financially beneficial."

For Amazon, a successful test could lead to a quicker national rollout of Amazon’s grocery drop-off service than rolling out its own trucks across regions. AmazonFresh currently delivers in Seattle, Los Angeles and San Francisco.

Amazon is said to be using the Postal Service for more of its regular deliveries. It also has an exclusive contract with USPS for Sunday delivery in about two-dozen U.S. cities so far.

"We work with Amazon. They’re an excellent, excellent customer and an excellent partner. We’d like to deliver their groceries," Postmaster General Patrick R. Donahoe told The Wall Street Journal. "As the Postal Service, we visit every house, every day. Why not?"

Do you expect Amazon’s test of grocery deliveries with the U.S. Postal Service will be successful? What strengths and weakness does USPS bring to the grocery delivery game? What questions would you have about the test?

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21 Comments on "Will the Postal Service add fruits and veggies to its daily deliveries?"


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Keith Anderson
Guest
7 years 8 months ago
This pilot is possible in part because of AmazonFresh’s pre-dawn delivery service, which uses dry ice or frozen water bottles to keep perishables fresh for up to eight hours. Households can order by late afternoon and have groceries on their doorstep in the morning. In Seattle, that service is extremely popular, reportedly accounting for more than half of all orders. Over the past 24 months, AmazonFresh’s expansion has been rumored to include anywhere from six new metros to as many as 40. I have long been skeptical of the larger numbers, at least under the assumption that Amazon would be running a closed-loop logistics model including managing its own delivery fleet. The nuance of managing route density for perishable goods is significant, and a two-year minimum ramp to profitability is the benchmark. With Instacart rapidly expanding using its asset-light model that partners with brick-and-mortar retailers, perhaps Amazon is beginning to sense the urgency. But piggybacking on the USPS could accelerate rollout to more markets and minimize Amazon’s overhead. The USPS needs the business, as its… Read more »
Al McClain
Guest
Al McClain
7 years 8 months ago

Although I wish the U.S. Postal Service and Amazon well, I imagine this will be great fodder for the late night comedians. While it is true that they visit almost every house every day, my experience has never been that they are 99 percent-plus reliable in terms of accuracy or timeliness, and they will need that level of reliability for this to work.

Gene Hoffman
Guest
Gene Hoffman
7 years 8 months ago

How can the USPS be successful in delivering groceries when it couldn’t envision what was happening to its future business fifty years ago?

The greatest strength the USPS brings to grocery delivery is it has a lot more free time than before competitors overtook a huge chunk of its business.

The question I have regarding this test is the many elements of WHY.

Max Goldberg
Guest
7 years 8 months ago

The postal service has the trucks, the staff and the facilities. There will be some hiccups, but overall the test should be a success.

Amazon needs to be able to grow its delivery options without adding fleets of vehicles and staff. Bezos and company have become obsessed with driving profitable revenue. Deliveries through USPS make sense. Plus, they allow Amazon further delivery options, so debacles like last Christmas don’t happen again.

Paula Rosenblum
Guest
7 years 8 months ago

I am far less negative about the USPS than some other people. One of RSR’s first jobs was an analysis of customer service at the USPS vs. others. To everyone’s surprise, it came out #1 in customer friendliness.

The fly in the ointment remains the same for the USPS as everyone else—the cost of driving refrigerated trucks around town and the challenge in predicting precise windows.

Still, the USPS doesn’t have to make quite as much money at it as its competitors, so it has a decent chance, really.

Don’t count them out, kids. They’re better than we give them credit for.

Lee Peterson
Guest
7 years 8 months ago

Good idea. Take a hungry delivery service that’s completely set up for every day delivery (unlike the drones from Amazon or uncertain Uber) and give them a shot at grocery. Could be huge.

Mel Kleiman
Guest
7 years 8 months ago

WOW someone at the Post Office has finally gotten it. In today’s world it takes new thinking and bold action just to survive. The only real question is, will the employees and the bureaucracy also get it?

Amazon could teach them a lot, but if you aren’t willing to change it won’t do any good.

I hope this test really works out. But can the post office really develop a customer-centric focus?

Ben Ball
Guest
7 years 8 months ago

There remains lots of evidence that Amazon has ambition to own its logistics fleet, but clearly they are open to alternatives.

Brilliant! How about Amazon buys the USPS?

With regards to the success of this test, my first reaction was “the biggest problem is going to be the perception of the USPS and the conflict with delivering what has to rank in consumers’ top three “must get it right” categories (meat, dairy, produce).

Then I read on and, voila! the answer. Do it in the dark of night so no one knows that the produce fairy is really the postman.

Again, brilliant! This is just weird enough to watch out for!

Ralph Jacobson
Guest
7 years 8 months ago

With the U.S. online grocery market struggling to gain share for literally the past two decades, I do see this as alleviating at least one traditional obstacle. The challenge is partnering with the USPS, an already severely unprofitable entity at this point. Will this help bolster the USPS’ viability for the near term? Perhaps. I think Amazon is offering a service that many busy people might appreciate.

Bill Davis
Guest
7 years 8 months ago

Sure as the postal service has been managing deliveries for quite some time and has “the largest civilian vehicle fleet in the world.

Just yesterday I saw a USPS truck on my street delivering packages on Sunday for Amazon.

Chuck Palmer
Guest
7 years 8 months ago

Think of the potential consumer experience. Staples and specials waiting on your porch in the morning. This might even open new customer bases to local small-batch purveyors. Remember the milk man? Could be exciting.

I’m glad to know the USPS is open to experimentation and new service models. Sometimes your customers are the ones who point to the future. My favorite part of this is the win-win nature of the potential collaboration.

Perhaps the USPS tightens up its logistics and operational standards, but really, it has a pretty strong track record. And for Amazon, recognizing that early-morning window puts them in a new, real-world relevance with their customers—enabling a better way.

Disruption, indeed.

Roger Saunders
Guest
7 years 8 months ago
Let’s keep in mind, this is a TEST. It’s not so much a test of the USPS, it’s a test of Amazon’s ability to provide quality, selection, and pricing value. The USPS is taking out the next most important items for consumers when it comes to choice of a grocer—location/convenience. The USPS reaches every door, everyday, in the U.S. Making use of trucks in off-hours (3 a.m. to 7 a.m.) provides them with an opportunity to reach doors during light traffic hours, and before most consumers are off to work. The post office should be able to meet its end of the bargain. What the post office has to do is 1.) provide their service in a profitable manner to the post office, i.e., make money on these transactions, and 2.) keep the political hacks off their backs. UPS and FedEx haven’t stepped up to the plate to offer their services, so it’s important to make certain the USPS doesn’t get “stabbed in the back” in the halls of Congress. Beyond the Amazon test in… Read more »
Steve Montgomery
Guest
7 years 8 months ago

The USPS logistics are built on trucks running the same routes every day. The routes are based on a variety of elements to ensure efficiency, etc. It will be interesting to see if they can effectively manage having a second set of routes that vary daily with inconsistent loads.

To me this is a classic chicken and egg issue. If they can achieve a fairly high volume then it has a chance, but if they are driving trucks miles between stops then the cost to the USPS will likely outweigh any payment they receive.

Larry Negrich
Guest
7 years 8 months ago

I am not as optimistic as some of the other contributors. I don’t believe that USPS has the flexibility to embrace an adaptive business model that would result in (profitable) grocery delivery.

The USPS has been staring their demise in the face for twenty plus years and has been slow to address the crisis and reluctant to make necessary (read: any) changes other than to say they will reduce their service further. Now the USPS is going to team with Amazon in the lowest-margin retail sector with the result being a new, profitable enterprise? It’s not the trucks, the routes, the delivery—it’s the inflexibility. Change the model, please.

Kelly Tackett
Guest
7 years 8 months ago

While I hope the test is successful, I’m not overly optimistic. Amazon has been using USPS for several of my deliveries lately that have been not only past the two-day shipping of Prime but significantly late. Further complicating the matter is that you aren’t able to track where the heck your package is on Amazon when it sends it via USPS. You are instructed to contact the carrier directly. I thought the purpose of delivery is avoiding a trip to the store or PO.

Paul Sikkema
Guest
Paul Sikkema
7 years 8 months ago

Most people don’t know that the USPS has been doing very delicate and time sensitive deliveries longer than most of us have been alive. These deliveries are always hand tracked and given the utmost priority and care. Most of the time these items were so sensitive that they didn’t ride in the back of the truck with the rest of the mail. They ride in the front seat with the drivers. Most of these sensitive deliveries were irreplaceable. I worked out of Chicago South Distribution Center for a few years and I can not remember a time where they messed these deliveries up.

If they take their experience with this mail and apply it to Amazon’s produce, everything will go just fine.

Oh, What is it? Homing pigeons and baby chicks.

Mark Price
Guest
Mark Price
7 years 8 months ago

The USPS has excellent execution, hidden inside a broken business model run by Congress. They are, after all, able to deliver mail and packages to homes nationwide in good shape and when they say they will.

This executional capability will suit Amazon well, since they have a strong business model, very loyal customers and front end order management technology. I look forward to being able to order groceries from Amazon for daily delivery soon in my town.

Ed Rosenbaum
Guest
7 years 8 months ago

No major program starts without some bumps in the road. This will be no different. And yes, I see it as having possibilities of being successful plus opening other silos to enter into. The USPS has to start operating like a “for profit” company answering to its stockholders, the American public. For too many years they have been hiding behind the government’s pocket book. That has to stop. If this is that “stop,” then the management has to change from using the government as a security blanket to being public and accountable.

Amazon might be generous in their dealings while this is a test. But once the rollout is for real and their protected time is over, watch out. Other better run companies will be knocking on Amazon’s door offering a better package and more profits.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
7 years 8 months ago

Will Amazon’s test of grocery deliveries with the U.S. Postal Service be successful? Strengths, as mentioned: they already deliver to every home. Weakness: delivering perishable products, and do the people take delivery at those hours or are the items left on the doorstep? What’s the likelihood that Amazon’s test of grocery delivery with the USPS will be rolled out to other areas? Success may be measured in the demographics served, i.e. more people living in NW US and San Francisco cotton to this kind of service. Rural areas or less motivated populace?

So my answer is: If it’s successful, it will be rolled out to other areas, selectively.

Jeb Watts
Guest
Jeb Watts
7 years 8 months ago

I see a lot of banana bread in the future.

Ed Dennis
Guest
Ed Dennis
7 years 8 months ago

It may be successful in San Francisco because of the early attention, but will not work long term due to the culture and lack of direct responsibility and accountability in the USPS system. The primary strength the USPS brings is breadth of coverage. The weakness is that there is no system of accountability within the USPS system that would insure attention to detail. I personally would not trust the USPS with my food. San Francisco has a unique climate, cool, moist and little if any seasonal change. Kind of like being in a produce cooler. Lets see the USPS handle this in Phoenix or Anchorage—it isn’t going to happen. My primary question about the test is “Why was SF chosen”? If it is a real test, then doesn’t the micro-climate skew any results?

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