Post Office Plan To Deliver Groceries Gets Green Light

Postal Regulators approved a two-year market test allowing USPS to partner with local retailers and make home deliveries for groceries.

Post Office Plan To Deliver Groceries Gets Green Light
Getty Images / Kevork Djansezian

The United States Postal Service knows a thing or two about delivering the mail, but they haven't been quite so good at turning a profit. Fortunately, the agency's got a plan to help turn things around — daily grocery deliveries.

The Postal Regulatory Commission approved a two-year market test of a grocery delivery service, called Customized Delivery.

It's an expanded version of USPS's partnership with Amazon, which let USPS pick up and deliver groceries ordered on Amazon in San Francisco. The new plan calls for more retail partners and a wider scope. 

Now, Customized Delivery isn't going to singlehandedly revive the Post Office's flagging finances — potential revenue from the program is currently capped at $10 million, which would hardly make a dent in the estimated $100 billion USPS owes in debt and unfunded liabilities.

But as a Motley Fool writer points out, it "tests a path which could fundamentally change how the Post Office does business. ... Leveraging a partner for delivery makes more sense and the USPS and online retail in general are natural partners."

But these aren't uncharted waters — home grocery delivery is going through a resurgence in popularity, and the USPS's new venture will be competing against companies like Peapod and FreshDirect, along with heavyweights like Wal-Mart and startups like Uber's Corner Store.

And the Post Office's entry into the market hasn't been welcomed by everyone — the Taxpayers Protection Alliance submitted complaints to USPS regulators when the plan was proposed, claiming USPS will unfairly distort the market.

"This action works to hurt private businesses who cannot afford to bring their price down to a level where they can be competitive. A government agency should not be working to compete with American businesses."

The latest plan is just one recent move USPS has made to help the agency survive, including partnerships with Amazon to support Sunday deliveries, and a partnership with office-supply chain Staples to open new postal centers at Staples locations.

This video includes images from Getty Images.