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USPS Requests Permission to Test Grocery Delivery

Word got out that the USPS had been testing grocery delivery for Amazon, and on Tuesday, the agency officially filed a request with the Postal Regulatory Commission to allow it to conduct a Market Test of such a service designed for retailers. “Customized Delivery is a package delivery service offering that will provide customers with delivery of groceries and other prepackaged goods, primarily during a 3 am to 7 am delivery window.”

The Market Test will begin on or after October 24 and will determine the operational feasibility and optimal pricing structure for that type of service.

Customized Delivery is a competitive product, giving the USPS much more leeway than if it were a “market dominant” product, such as first class mail. But it still must run market tests past the Postal Regulatory Commission, which recently established new procedures concerning such requests.

The USPS wrote in its filing there was no reasonable expectation that Customized Delivery would create an “unfair or otherwise inappropriate” competitive advantage to other parties, including small businesses.

The Postal Service told the Wall Street Journal earlier this month that it was working with Amazon “to determine if delivering groceries to residential and business addresses would be feasible from an operations standpoint and could be financially beneficial for the organization.”

Tuesday’s filing included some information about testing it had recently begun for early morning grocery delivery, presumably the testing it had done for Amazon, though some parts of the document were redacted.

Here’s a summary of some key information revealed in the filing about the Customized Delivery testing already undertaken:

The retailer brings groceries already packed in retailer-branded totes, some of which are chilled or include freezer packs, directly into Postal Service destination delivery units between 1:30 am and 2:30 am. The totes are all the same size and color, and have a QR code on the outside that work with iPhone scanners and a USPS-developed iOS application.

City Carrier Assistants (CCAs) make the deliveries from 3 am to 7 am, placing the totes in a location designated by the consumer, without ringing the doorbell or knocking on the door. The CCAs wear postal uniforms and lighted caps as a safety measure and for easy recognition by the public.

During the operations test, deliveries have been averaging 1 to 4 totes per address with an average of 160 totes per day for the 38 ZIP Codes included in the testing.

In its filing, the Postal Service wrote, “Through this two-year market test, the Postal Service seeks to test and develop a long-term, scalable solution to enable expansion of customized delivery to additional major metropolitan markets across the nation. The Postal Service may also seek to test other possible delivery windows throughout the day, as part of this market test.”

“Ultimately, the Postal Service expects this will generate more package deliveries that do not currently move within the postal system,” it wrote. The redacted filing can be found in this PDF file on the PRC.gov website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.