Many doomsayers have predicted the imminent demise of the U.S. Postal Service, usually involving a scenario in which online services replace it. But the Postal Service might just have found a way to survive – or at least hang on for awhile longer – by banding together with the world’s largest online retailer.
Over the weekend, Amazon, with the help of the post office, began delivering packages on Sundays in New York and Los Angeles. The service will expand early next year to Dallas, New Orleans, Houston and Phoenix, and eventually to other cities nationwide.
Amazon has spent billions of dollars to build new warehouses to boost its ability to offer quick delivery service. Under the new arrangement with the Postal Service, packages will be shipped to the warehouses on Saturday night or Sunday morning, and post office employees will deliver them from there to customers’ doorsteps on Sunday.
Amazon officials say they chose to partner with the Postal Service over other private delivery services such as United Parcel Service or Federal Express because the technology between Amazon and the Postal Service is compatible. But another big reason is that the Postal Service is the only delivery service that reaches every address in the nation either through direct delivery or post office boxes.
The new arrangement is expected to be a financial boon to a Postal Service, which is reeling from declining use of “snail mail,” and competition from Internet social networks and private delivery services. If Amazon had chosen to go with one of the private delivery services, it would have been another severe blow to the Postal Service.
Under the new partnership, however, Sunday service is likely to generate more sales for Amazon and more business for the Postal Service. The Postal Service has delivered packages for its own purposes on Sundays during the holiday season, but this is the first time it will do so every Sunday.
This new arrangement is not good news for everyone. It represents another blow to brick-and-mortar retailers who already have been jolted by online competition.
And most states have yet to resolve the issue of how – or even if – to charge sales taxes for online purchases. If Amazon can keep its exemption from charging local and state sales taxes, it will continue to have a significant advantage over local retailers.
But the concept of seven-day deliveries might be unstoppable. Amazon already offers same-day delivery seven days a week on its online grocery service, which is offered in some cities, and that service will continue as Sunday parcel delivery expands.
Customers who want their purchases delivered as soon as possible, no matter what day it is, soon should have that option. That could be a big step for Amazon and, for now at least, for the Postal Service.
It’s ironic that the Postal Service, which is bleeding around $6 billion a year in red ink, has considered ending Saturday deliveries to cut costs. Now, it seems, the agency might get a new lease on life by adding another day of deliveries on Sunday.