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USPS to test out same-day delivery service

Friday, November 23, 2012
A USPS worker is seen in this undated file photo.

A USPS worker is seen in this undated file photo. (KABC Photo)

The U.S. Postal Service is trying to keep up with the rapid growth of e-commerce and testing same-day package delivery.

The same-day delivery test program starts in December for customers in San Francisco.

The delivery program, called Metro Post, will offer a price similar to its competitors. If things run smoothly, the program will quickly expand next year to other big cities including Boston, Chicago and New York. It follows similar efforts by eBay, Amazon.com, and most recently Wal-Mart Stores Inc., which charges a $10 flat rate for same-day delivery.

USPS is hoping the service can help offset steady declines in first-class and standard mail. Operating as a limited experiment for the next year, Metro Post is projected to generate between $10 million and $50 million in new revenue from deliveries in San Francisco alone, according to postal regulatory filings, or up to $500 million, if expanded to 10 cities.

The filings do not reveal the mail agency's anticipated expenses to implement same-day service, which can only work profitably if retailers have enough merchandise in stores and warehouses to be quickly delivered to nearby residences in a dense urban area.

The projected $500 million in potential revenue, even if fully realized, would represent just fraction of the record $15.9 billion annual loss that the Postal Service reported last week.

The Associated Press contributed to this report.

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