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Online retailer Amazon announced that its prime customers in New York and Los Angeles – those who pay a $79 annual charge – can now enjoy free two-day shipping and can receive packages on Sunday. Amazon has teamed up with the US Postal Service bringing some much needed revenue to the ailing behemoth, and plans to extend its Sunday service to Dallas, New Orleans, Houston and Phoenix in 2014.
Dave Clark, Amazon’s vice president of worldwide operations said on Monday, “If you’re an Amazon Prime member, you can order a backpack for your child on Friday and be packing it for them by Sunday night.”
The deal comes at the right time for the US Postal Service, which despite its hallowed status, is suffering from operational inefficiencies and has suffered losses for 7 consecutive quarters. At the same time FedEx, DHL and UPS has been doing booming business.
More than competitors, the US Postal Service, was devastated by the introduction of the internet and email, as much of the agency’s revenue depended upon the sale of its stamps. It’s finances were further handicapped by a congressional mandate issued in 2006 to prefund health care for future retirees up to 75 years.
At a time when the Postmaster General wants a five-day delivery schedule for first-class mail to reduce costs, the deal from Amazon might prove to be a life saver for the agency.
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The Postmaster General said on Monday, that his request for a five-day schedule had not included package deliveries, which has continued to grow, and the agency is happy to offer shippers like Amazon the benefit of Sunday deliveries.
CNBC reported that Postmaster General Donahue told the news channel that with this new deal, the Postal Service will be “delivering packages seven days a week in select cities.”
