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October 15, 2012

U.S. Postal Service Hopes Same Day Delivery Service is a Moneymaker

By Tabitha Naylor, Contributing Writer

The United State Postal Service will begin testing a same day delivery service that it calls Metro Post. The USPS (News - Alert) informed the Postal Regulatory Commission that it intends to test the new service within an undisclosed metropolitan area beginning around November 12. The experimental program is expected to last at least a year.

Metro Post details are still being determined but the USPS intends for delivery purchases to be made before 2 pm or 3 pm, and that deliveries would arrive between 4 pm and 8 pm. The USPS hopes to partner with an online e-commerce company with at least 10 sites throughout the nation and at least one within the test area.

Image via Shutterstock

The USPS estimates that revenue from this new service could exceed $10 million but should remain below the $50 million mark. Metro Post is aimed at online businesses that hope to enhance customer relations by providing same day delivery.

Many online companies are experimenting with same day deliveries in the hopes of attracting new customers or retailing perishable items. Amazon has begun expanding its same day delivery service, while Wal-Mart is testing the service.

The USPS will face some competition in this market, with startups like Shutl offering similar services. Industry analysts believe that same day delivery could be profitable, but it would depend on the pricing of such services. The USPS has not publicly announced prices for its test program, but states that prices will approximate those of similar services.

The year-long test will help the USPS determine if the program is feasible, what limitations may pertain and the optimal pricing structure. The items will be transported from locations within the same metropolitan areas and will exclude deliveries requiring air transport.

Edited by Brooke Neuman
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