PRC: Notice of the USPS of Market Test of Experimental Product – Customized Delivery


USPS_groceriesSubmitted 9/23/2014 2:53:11 PM
Filing ID: 90393

Pursuant to 39 U.S.C. 3641, the United States Postal Service hereby gives notice that it intends to conduct a test of an experimental competitive product, named Customized Delivery. The Postal Service also hereby gives notice that it is today filing certain portions of this document under seal, pertaining to the Postal Service’s pricing plans for this market test. The protected material has been redacted from the public filing document. An application for non-public treatment of the material is attached.

Customized Delivery is a package delivery service offering that will provide customers with delivery of groceries and other prepackaged goods, primarily during a 3 a.m. to 7 a.m. delivery window. The Postal Service may also test other customized delivery windows as part of this market test. The market test, which will begin on or shortly after October 24, 2014, is designed for retailers to deliver groceries and other prepackaged goods in a customized delivery window, tailored to their unique offerings and customer base. In addition to testing the operational feasibility of customized delivery windows, this market test will also assist the Postal Service in determining the optimal pricing structure for this type of service.

Subchapter III of Chapter 36, Title 39, United States Code, establishes authority for the Postal Service to conduct market tests of experimental products. This notice provides the information required by 39 U.S.C. 3641(c).1 Pursuant to that provision, the Postal Service is also filing notice of this market test in the Federal Register.

Description of Nature and Scope of Experimental Product

Grocery delivery services are expanding across the nation, with businesses ranging from the nation’s largest retailers, to niche operators, to the popular car service Uber entering the marketplace. With its operational reach, the Postal Service has an opportunity to provide retailers a nationwide solution that offers a trained workforce and the trust and reliability of the Postal Service brand. By expanding its carrier services and offering customized delivery, the Postal Service can garner profitable revenue through new revenue streams.

Recently, the Postal Service began conducting operational testing for early morning grocery delivery. In the current process, the retailer brings groceries already packed into retailer-branded totes, some of which are chilled or include freezer packs, directly into Postal Service destination delivery units (DDUs) between 1:30 a.m. and 2:30 a.m. The totes are all the same size and color, and have a QR code on the outside. The Postal Service receives a manifest file from the retailer containing the address and QR code number for each tote. This file is used by the Postal Service to dynamically route totes and create a line of travel for each route.

City Carrier Assistants (CCAs) scan totes using iPhone scanning, which provides route order information via a USPS-developed iOS application. The totes are sorted on the workroom floor by route and delivery order, and are then back-loaded to a truck for delivery. Deliveries occur from 3 a.m. to 7 a.m. These deliveries are unattended — the CCA will not ring the doorbell or knock on the door. The carrier places the totes in a location designated by the consumer for delivery. Totes are scanned at key steps in the process to provide tracking and visibility through to delivery. 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. 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.

Read more: Postal Regulatory Commission: Library: Dockets Details.

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