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.