Business & Real Estate

Postal Service hopes to expand grocery delivery service

Amazon Fresh deliveryman Tim Wilkie prepares a grocery order for delivery to a residence on Mercer Island, Wash.
Amazon Fresh deliveryman Tim Wilkie prepares a grocery order for delivery to a residence on Mercer Island, Wash. Associated Press file

The U.S. Postal Service plans to continue delivering groceries to homes in the Sacramento area and expand its experimental business model to more markets.

In partnership with AmazonFresh, the delivery service has the Postal Service’s fleet delivering fresh groceries and prepackaged goods to customers in 38 experimental ZIP codes, including metropolitan areas such as Sacramento, Los Angeles, San Diego and New York City.

Meiko Patton, Sacramento region Postal Service spokeswoman, said the market test has been operating in Sacramento since mid-March 2016.

Deliveries can be made to ZIP codes as far north as the Chico area, west to Vacaville, east to Pollock Pines and south to Fresno.

Speaking to the success of the initial testing, Patton said, “The volume of deliveries is steadily growing and our on-time performance is more than 90 percent.”

Last week, Amazon announced that it is opening its 10th California warehouse in Sacramento, which will create more than 1,000 full-time jobs.

AmazonFresh offers fresh groceries and products from local specialty shops, including baby items, pet products, household goods and more, according to Nell Rona, an Amazon spokeswoman.

To use AmazonFresh, customers pay $299 a year, or $3.85 a week for Prime members.

The process involves the retailer bringing groceries packed into chilled, insulated, retailer-branded totes to Postal Service destination delivery units. The Postal Service then delivers the groceries customers’ homes before sunrise. No Postal Service worker will ring the doorbell or knock on the door.

Earlier this month, the Postal Service requested to extend the program until October 2017, as well as expand into new markets.

The new business model is projected to contribute to the financial stability of the Postal Service by generating more package and bolstering the company’s revenue.

With the widespread use of the internet and email for correspondence, USPS has been sustaining steady financial losses over the past decade, amounting to budget shortfalls and planned cuts, according to reports posted on the USPS website. In 2015, USPS reported a net loss of $5.1 billion in its end-of-year fiscal results.

USPS has predicted that the market test may bring in up to $10 million in total revenue.

“We deliver everything a consumer would need without them having to leave their homes, just like the mail,” Patton said.

Customers can visit amazon.com/fresh to see if AmazonFresh is available in their area.

Emily King: 916-321-1038

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