This is huge news, both for Amazon and for the US Postal Service. Starting with LA and New York, Amazon Prime customers will now get package delivery on Sundays at no extra charge.
Amazon prime customers – who pay a $79 annual charge – will now be able eligible for free two-day shipping on millions of items, and can receive their packages on Sunday. The company announced on Monday that it has teamed up with the U.S. Postal Service and plans to roll the service out to a large portion of the U.S. in 2014 including Dallas, Houston, New Orleans and Phoenix.
USPS has really been struggling, with 7 consecutive quarters in the red.
The semi-independent government agency has suffered in recent years with the introduction of email and the drop in sales from stamps as well as a 2006 congressional mandate to prefund up to 75 years of its future retirees’ health care.
Earlier this year, Postmaster General Patrick Donahoe made pleas to lawmakers to allow the financially troubled Postal Service to switch to a five-day delivery schedule for first-class mail in an effort to reduce costs to return the organization to financial stability.
Package deliveries – which was never part of this plea – continues to grow and Donahoe said in the press release on Monday that the Postal Service is very happy to offer shippers like Amazon the option of Sunday deliveries. Research on the websites of rivals FedEx and UPS suggest that the two companies do not currently offer a Sunday delivery service. Both were not immediately available for comment when contacted by CNBC.
The internet and e-commerce have been tremendously disruptive to the Postal Service. This plan will help the USPS find a financial model that allows them to prosper instead of fade. A real win/win.
I hope this means good things for the USPS. That 2006 mandate was deliberately designed to cripple the agency and make it politically vulnerable enough for privatization, which would be regrettable, if not disastrous for lower-income people in rural areas.
I also hope postal workers will be fairly compensated for working on Sunday.
I’ve heard all kinds of horror stories about the USPS while I working over there in LIC, aka the “country club”.
There are two house bills introduced to end the poison pill the Bush era lame duck congress pushed through with all republican votes. That bill required the USPS to collect and hold 75 years of retirement funds. This the reason the USPS is in the red. It is designed to end the USPS. Allowing private companies to take over a service mandated in our Constitution. The only business called out in that document. A link to the bills is attached.
http://www.thomas.gov/cgi-bin/thomas
Help end this take over.
When you sup with the devil, you’d better use a very long spoon. If the USPS thinks Amazon will be their savior, they’re in for a rude awakening.
Between email and online bill pay, First Class mail is taking a huge hit. My mailbox is basically just junk mail and the very occasional (and much appreciated) card/paper letter from old school family and friends. Package delivery is the only part of USPS making money, so trying to become Amazon’s shipper of choice makes sense, unless you’ve studied Amazon’s previous practices. If USPS becomes, even partially, dependent on Amazon shipping, they’re vulnerable to Bezos’ hard-ball bargaining, and that could be a bigger threat than declining mailings.
Gladly. But the link’s incomplete.