|Sat Feb 8 2014 20:20:35|
USPS Ends Same-Day Delivery Pilot in San Francisco
By: Ina Steiner
The Office of Inspector General for the USPS found the Postal Service did not properly implement the pilot test of its same day delivery pilot program in San Francisco. The program, called Metro Post, will be suspended in that city by March 1, 2014, while the pilot in New York City continues. (Sources have told EcommerceBytes the New York pilot began in December with two customers that have both an online and a retail presence, it's unknown how many retailers are now participating.)
The Metro Post service enables customers to order products online by 2 pm from partnering retailers and receive their shipments the same day between 4 pm and 8 pm. Only 95 packages were sent by the six participating retailers over a 5-month period (as of June 2013), while the target was to have 200 packages per delivery day.
The cost of its same-day delivery service is up to the retailer from which the shopper is purchasing, and buyers can find the status of their deliveries through the Track and Confirm Tool on USPS.com. More information about Metro Post can be found in this Newsflash article from last year.
According to the report released by the OIG late last week, the Postal Service expected to enter into agreements with several large retailers, but only one large retailer agreed to participate in the pilot, and later withdrew prior to implementation due other operational priorities. "The Postal Service was left with small local retailers that could not produce the target daily package volume. The Postal Service earned $760 and incurred costs of $10,288, with a net loss of $9,528," according to the report.
San Francisco is actually a hot bed of same-day delivery testing, including eBay Now and Google Shopping Express. One wonders if retailers were pressured into exclusivity by other same-day delivery programs.
The Postal Service began the Metro Post Same Day Delivery pilot to gain a competitive edge in parcel delivery and planned to gather sufficient data during the pilot to determine whether to continue the service.
The report said officials plan to re-initiate the program in San Francisco when they can secure large retailers' participation. Officials have initiated the pilot in the New York District 5 where large retailers are participating.
"Although the pilot could provide some revenue opportunities for the Postal Service, we could not evaluate these opportunities because the pilot was not properly implemented."
Hat tip to PostalNews.com.