While UPS buys its way into last mile and on-demand delivery with Roadie, the U.S. Postal Service is piloting a same/next-day delivery service in Texas, geared toward local business-to-consumer orders that companies bring to a local USPS office to get a discounted rate.
During the pilot of USPS Connect Local, small businesses can print prepaid labels using using ClickNShip, the USPS’s labeling system, and bring their packages to the dock of a post office near the final destination. The discounted rates are normally reserved for large-volume shippers. Packages must be dropped off by 7 a.m. for same-day delivery, otherwise it’s a next-day service.
USPS Connect Local, launched in July, is part of the agency’s 10-year Delivering for America plan, which has a goal of adding $24 billion in net revenue growth over that period.
In the past week, 93 postal facilities were added to the Texas pilot program, bringing the total locations to 588, mostly in the Dallas and Houston areas. Plans call for expanding that number to more than 800 by the end of September “as we refine our process and demonstrate our operational capability,” said USPS spokesperson David Partenheimer.
So far interest and participation in the program has come from local mom-and-pops and establishments including churches, printing businesses, electronics sellers, hair salons and craft shops “to name a few,” Partenheimer said.
He added there is a consultative aspect as well, with USPS experts advising local business owners on shipping strategies and growth opportunities. “We’re holding ‘Grow Your Business Day’ events in local communities as we expand the pilot,” he said. “We’re pleased with the enthusiasm in the community. This type of option has not been available to businesses before, so they are getting used to how it can help them.”
The USPS did pilot a same-day program in 2014 in San Francisco that ended badly due to a lack of participation, and there have been others as well, but Partenheimer said this one is structured differently.
“This is the first time this particular process has been piloted where business customers enter package information online, then bring prepaid, labeled packages directly to the back dock of the postal facility nearest their package destinations,” he said. “In return, they get affordable shipping rates only previously available to large-volume customers.”
Experts said the service can’t really be called same day, considering the early morning cutoff for local delivery, and questioned its value. It was also seen as similar to Parcel Select, an existing USPS offering.
“This is a limited service offering as orders need to be placed the previous day,” said Dean Maciuba, a managing partner of Last Mile Experts. “It’s not an on-demand, same-day delivery service and not exactly very much to crow about. Shipments have to be consolidated at the post office for the model to work.”
Nate Skiver, founder of LPF Spend Management, said he gave the USPS “a B for creativity, but a D for market relevance.”
“This is nothing more than offering Parcel Select services and rates to SMBs, and it’s definitely not what retailers nor their customers consider same-day delivery,” Skiver said. “At best this is a low-cost yet inconvenient way for SMBs to get local next-day delivery via the USPS. The issue, though, is the value is incredibly limited unless a significant portion of the retailer’s orders require local delivery. Otherwise, it’s not worth the hassle of sorting and dropping off the packages.”
Patrick Gill, CEO of online seller eCommerce Outdoors, wondered how a traditional labor and technology model would support USPS Connect, vs. an on-demand workforce and purpose-built technology.
“USPS is already having labor challenges and to pull this off as add-on to existing postal mail carriers seems ambitious,” Gill said. “We know there is demand but the service needs to be consistent and reliable, backed with great technology, processes and updates to both merchants and recipients. Are they ready to deliver a similar customer experience to all of the on-demand, same-day delivery competition that’s already well ahead on this race?”
Partenheimer said the USPS is getting feedback from participating merchants “that it’s worth the trip” to the local DDU to get the discounted rate. “And remember, USPS Connect Local is designed for community-centered, Main Street commerce, so the designated postal facility is in the same community as the local businesses,” he added.