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The U.S. Postal Service Tests Same-Day Delivery


Shante Sapp lingers outside an office building on 14th Street in Manhattan. She’s scheduled to pick up some packages from a photography company inside. She rings the doorbell, but there’s no response. “I don’t know why no one’s answering,” she says, her anxiety rising.

A 27-year-old U.S. Postal Service letter carrier, Sapp works for Metro Post, the agency’s attempt to launch same-day package delivery. Local businesses that sign up can pay the Postal Service a fee to pick up a package in the afternoon and have it delivered to a customer in the city by evening. Sapp has to rush two framed photographs to people in different parts of town and is itching to get a move on. Finally, someone buzzes her in. Soon she’s weaving through traffic again in her white postal van. “Everybody likes getting packages,” Sapp says. “But these are packages that people really want.”

Launched in December, New York Metro Post is still a test-tube-size experiment. There are just five letter carriers making same-day deliveries in the city. The USPS is cagey about details—it won’t say how many businesses have signed up or how much it charges customers for each package. It may be wary of calling too much attention to the service. New York is its second try at same-day delivery.

The first pilot program, in San Francisco in 2013, was a flop, and postal officials said it will be suspended in March. According to a report by the USPS Inspector General, San Francisco Metro Post signed up six customers and delivered 95 packages in five months. The agency is deliberately keeping the experiment small, in part to keep its many detractors on Capitol Hill from piling on if it’s not a success. “You could spend millions of dollars,” says Gary Reblin, USPS vice president for new products and innovation. “If it doesn’t work, that’s a big loss. Our exposure is a lot less this way.”

Despite Metro Post’s rocky start, the Postal Service considers it an important test of its ability to adapt and survive. The agency lost $5 billion in 2013 as overall mail volume—and first-class letters in particular—continued to drop. The number of packages it handles nationwide is rising, however, largely because of online shopping. On Feb. 7, the agency boasted that in the last three months of 2013 it delivered 1 billion packages, up 10 percent from the same period the year before. Revenue rose by 14 percent, to $3.4 billion.

Metro Post is all about shifting the agency’s focus from dying first-class mail to package delivery of all kinds. Last November, USPS announced an agreement to deliver packages for Amazon.com (AMZN) on Sundays in New York, Philadelphia, and Los Angeles, among other cities. The Sunday service has taken hold much more quickly than daily deliveries. The USPS says it’s transported more than 2.5 million packages for Amazon so far.

In the past few years, big-name retailers have launched their own same-day delivery services. Amazon, EBay (EBAY), Wal-Mart Stores (WMT), and Google (GOOG) all offer some form of near-instant gratification for customers in various cities. The USPS envisions ultimately providing businesses with the ability to compete with their larger online rivals. To do so, it has to free itself of decades-old union rules that discourage letter carriers from working odd hours.

Metro Post employees, and those who deliver packages on Sunday for Amazon, are part of a new class of postal workers called City Carrier Assistants. They’re members of the National Association of Letter Carriers, but they make an average hourly wage of $16, compared with a veteran letter carrier’s average pay of $27 an hour. The USPS can require Metro Post employees to work evenings and Sundays, when traditional carriers would be reluctant to step in. Union leaders encouraged the move as a way to make the Postal Service more agile. “They are new, they are young, and they are excited to be doing this,” says Jesse Garrett, a USPS customer-service supervisor who oversees Metro Post and Sunday delivery in Manhattan.

It’s too early to tell whether Metro Post will take off in New York. Garrett says on its biggest day yet, his staff delivered 68 packages. That’s a far better showing than the failed San Francisco version. “It was a rushed pilot—they announced it, but it wasn’t really ready to go,” says Jim Sauber, chief of staff of the letter carriers’ union. “Sometimes you learn more from the failures than the successful ones.” (The USPS says it intends to eventually revive that city’s delivery service but doesn’t say when.) Garrett says he’s told all his friends in New York about Metro Post: “This is the first time I could tell them that there’s something about my job that was cool.”

The bottom line: The Postal Service’s pilot Metro Post program lets New York businesses offer customers same-day delivery.

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Leonard is a staff writer for Bloomberg Businessweek in New York.

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