Giant online retailer Amazon.com Inc. is turning up the heat on rivals this holiday season and beyond under a new deal with the U.S. Postal Service for delivering packages on Sundays.
Starting this week, the postal service will bring Amazon packages on Sundays to shoppers' doors in the Los Angeles and New York metropolitan areas at no extra charge. Next year, it plans to roll out year-round Sunday delivery to Dallas, New Orleans, Phoenix and other cities.
Getting packages on Sundays normally is expensive for customers. United Parcel Service Inc. doesn't deliver on Sundays, according to a spokeswoman. And FedEx Corp. said Sunday "is not a regular delivery day," though limited options are available.
The deal could be a boon for the postal service, which has been struggling with mounting financial losses and has been pushing to limit general letter mail delivery to five days a week.
Spokeswoman Sue Brennan said that letter mail volume is declining "so extremely," yet package volume is "increasing in double-digit percentages."
The postal service's Sunday package delivery business has been very small, but the arrangement with Amazon for two of the retailer's larger markets, Los Angeles and New York, should boost work considerably.
To pull off Sunday delivery for Amazon, the postal service plans to use its flexible scheduling of employees, Brennan said. It doesn't plan to add employees, she said.
Members of Amazon's Prime program have free two-day shipping and, under the new deal, can order items Friday and receive them Sunday. Customers without Prime will pay the standard shipping costs associated with business day delivery.
As consumers increasingly move online to shop, retailers are finding that their shipping policies can be a bellwether of customer loyalty. Though not necessarily offering Sunday delivery, many are testing same-day service.
Wal-Mart Stores Inc. is testing same-day delivery service in northern Virginia, Philadelphia, Minneapolis, Denver and the San Francisco and San Jose region. Last month, EBay Inc. agreed to acquire Shutl, a London start-up that uses a network of same-day couriers to deliver goods ordered online in hours, even minutes.
In March, Google Inc. said it would test a same-day delivery service called Google Shopping Express for online purchases in the Bay Area. Specialty sporting goods store Sport Chalet Inc. began offering a similar service in April.
But adding Sunday service takes the competition to a new level. In addition to using its own employees for everyday deliveries, Amazon normally relies on the postal service, UPS, FedEx and smaller couriers to deliver goods on the day they're ordered.
In the past, the world's largest online retailer has offered Sunday shipping on a "very small scale" for goods sold through its main website, said Dave Clark, vice president of worldwide operations and customer service.
And after the AmazonFresh grocery delivery service expanded from Seattle to Los Angeles in June, Prime subscribers could get hundreds of thousands of items brought to them on Sundays.
But the postal service partnership is the first time Clark knows of that "Amazon or really anybody else has done broad-scale Sunday delivery."
"It's going to be hard for others to replicate," he said.
Clark said the postal service "just happened to be a great fit" where "capability and desire matched."
The arrangement is "a bright spot for both organizations," especially because the postal service is "rapidly growing their package delivery operation," he said.
Clark said that Sunday delivery was "designed to launch as soon as we were ready" and that coinciding with the holidays was just a happy accident.
Los Angeles and New York were prime locations to introduce the service because Amazon's infrastructure is evolving there, Clark said.The company has a 1-year-old fulfillment center in San Bernardino, Calif., and recently announced plans for another in Moreno Valley.