Amazon this week announced an unusual deal with the US Post Office, in which the troubled governmental agency will deliver packages for the online retailer on Sundays. The agreement will begin with deliveries in select cites in the United States and grow into 2014, and it is not a temporary agreement aimed at the busier holiday selling period.
"As online shopping continues to increase, the Postal Service is very happy to offer shippers like Amazon the option of having packages delivered on Sunday," Postmaster General Patrick R. Donahoe said in a prepared statement. "With this new service, the Postal Service is now delivering packages seven days a week in select cities. Customers can expect the same reliable and valued service that the Postal Service currently provides."
Those select cities are currently Los Angeles and New York City. But Amazon notes that this service will be rolled out to Dallas, Houston, New Orleans, Phoenix, and other cities in 2014, with the goal being to cover "a large portion of the US population" by next year. The service is tied to the retailer's Prime subscription service, which provides members with free two-day shipping on most physical items (for $79 per year).
Although the postmaster general's statement suggests that the Post Office is open to adding other retailers to its Sunday delivery schedule, the move gives Amazon, at least temporarily, yet another advantage over its dwindling competition. In addition to two-day shipping, Prime members also get inexpensive one-day shipping and access to a Netflix-like streaming video service called Amazon Instant Video. Members can also borrow select Kindle ebooks each month. Amazon's unique ability to bridge the physical and virtual shopping worlds is a huge advantage over all of its competition.
As for the Post Office, which is losing about $25 million a day according to Mr. Donahoe, the Amazon deal is perhaps a way to bolster its business. Ironically, the agency earlier this year proposed halting Saturday deliveries in order to cut its losses, but that proposal was rejected by the US Congress. The US Post Office lost $15.9 billion on revenues of $65.2 billion in 2012.