Just ahead of the holidays, the U.S. Postal Service is testing a new program that offers major retailers Sunday delivery for orders placed on Saturday, a service mostly involving Amazon shipments until now.
According to the Associated Press, the service will be available in 20 U.S. cities. Postal carriers will pick up packages from the retailer’s local stores by on Saturday, for delivery the following day.
While it’s being launched now, the USPS said the pilot program is not related to the holiday season. A spokesperson added the postal service has been expanding holiday delivery, including early mornings, late afternoons and Sundays as volume warrants for the past few years.
Walmart is reportedly interested in the next-day Sunday service from the USPS, according to the AP report. The postal carrier has the advantage of covering every U.S. ZIP code, and handles last-mile service for both UPS and FedEx on a contract basis.
Based on data from shipping consultant ShipMatrix, the USPS is expected to see a 13% increase in deliveries between Thanksgiving and New Year’s Eve over 2016, totaling 850 million parcels. This compares to projected peak season growth of 5% to a record 750 million packages for UPS. FedEx is projecting 380 million to 400 million holiday parcels delivered this year, which it says is up 20% to 26% over 2015; a comparison to 2016 was not given.
According to ShipMatrix, UPS and FedEx are expected to see a drop in share of peak season volume compared to 2016, from 32.6% to 31.3% and from 18% to 17.8%, respectively, due to slower growth. The USPS, meanwhile, is projected to see its share rise from 44.5% to 45.6%. Courier services like Uber and Deliv are projected to grab a 5.2% share of holiday volume, up from 5% last year, ShipMatrix reported.
MCM Musings: This is a smart, aggressive move by the USPS, which is more and more reliant on double-digit gains in its parcel business as mail delivery dwindles and losses mount. The addition of Sunday deliveries for retailers is sure to boost that growth, especially given the fact that UPS and FedEx have added holiday surcharges while the USPS does not. The USPS has requested 2018 rate increases that would go into effect Jan. 21, including a 3.9% hike in Priority Mail, a key parcel delivery product. That request is pending before the Postal Regulatory Commission. Even if approved, the USPS is still a less expensive alternative to the major carriers. UPS’s general rate increase (GRI) of 4.9% will go into effect Dec. 26; FedEx announced the same GRI, effective Jan. 1.