January 8, 2020 (RISC-WP-20-002)

  • The same-day delivery of merchandise and groceries in the U.S. accounted for only 249 million packages in 2018, making it a niche market with uncertain financial and growth prospects.
  • The next-day delivery of parcels may well become a more critical segment than same-day — which bodes well for the Postal Service’s leading role in this market.

Although it is a rapidly growing market, same-day delivery of merchandise and groceries to consumers represented 249 million packages in 2018 — only 2 percent of the total domestic parcels market. Additionally, the business model used by some major same-day providers is unsustainable because it loses money with each delivery. The OIG found that many consumers are unwilling to pay for same-delivery at any price. If they are interested at all, it is mostly for urgent needs like medications or groceries.

Should same-day delivery remain a niche product mostly appealing to urban Millennials, next-day delivery could instead become the “new normal” for many online orders. As it keeps one eye on the future of same-day delivery, the Postal Service should also continue to focus on next-day delivery through flagship offerings such as Parcel Select Destination Delivery Unit (DDU). Failing to do so could jeopardize the long-term viability of its unmatched last-mile network.

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Comments (4)

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  • anon

    Same day delivery should only be pursued if it is profitable (i.e. does not lose money). The USPS loses enough money as it is. I believe all private parties that do same day delivery such as Uber eats or Amazon lose money on it. It is a gimmick and a waste of money and logistical focus.

    Mar 07, 2020
  • anon

    If the service is free, you're the product. At some point all of the data collected from drivers and buyers will become a viable product for organizations to employ. Things like traffic studies by local, state, and federal government - primarily through contract actions with vendors tasked to conduct such studies. Market trends analysis is already a day-to-day thing, and companies pay big money to see the flows of marketing chaos. You may think it's just fun and games buying that rubber dog poop from China, but that purchase feeds an information library that helps companies across the globe realize orders of magnitude of workflow and enterprise resource planning improvement.

    May 31, 2020
  • anon

    That type of analysis only slows the process down. If they gave you the option of getting same day for free or one day for free you definitely going to try for the same day. Delivery pricing is the only thing holding back same day and one day. There are few companies that can handle same day and keep the cost low, unfortunately USPS can only keep an eye out for it and watch how the competition does better before jumping on board.

    Jan 19, 2020
  • anon

    im agree

    May 02, 2020

Contributors

  • Jean Philippe Ducasse, Jeffrey Colvin, Jake Soffronoff and Richard Schadelbauer contributed to this report.

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