Metro Post Same Day Delivery Pilot – San Francisco District
BACKGROUND:
In December 2012, the Postal Regulatory Commission approved pilot testing of the U.S. Postal Service's Metro Post Same Day Delivery concept in the San Francisco District's 941 ZIP Code areas. This service enables customers to order products online by 2 p.m. from partnering retailers and receive their shipments the same day between 4 p.m. and 8 p.m. Carriers use smartphones that provide audio and visual package pickup and delivery routing directions that are integrated with the Postal Service's Dynamic Routing System Google Maps© application. Retailers and customers use the Postal Service's Track and Confirm application to track their packages.
The Postal Service began the Metro Post Same Day Delivery pilot to gain a competitive edge in parcel delivery by offering customers a convenient and flexible delivery alternative. The Postal Service planned to gather sufficient data during the pilot to determine whether to continue this delivery service.
Our objective was to assess implementation of the Metro Post Same Day Delivery pilot.
WHAT THE OIG FOUND:
The Postal Service did not properly implement the pilot. They did not have sufficient participation from the six selected retailers to achieve the required daily minimum target of 200 packages per delivery day. Only 95 packages were sent by the six participating retailers over a 5-month period. Implementation in the San Francisco District was based on the expectation of agreements with several large retailers.
However, only one large retailer agreed to participate in the pilot, and later withdrew prior to implementation due other operational priorities. The Postal Service was left with small local retailers that could not produce the target daily package volume. As a result, the Postal Service earned $760 and spent $10,288, with a net loss of $9,528 on the pilot.
WHAT THE OIG RECOMMENDED:
Postal Service Executive Vice President, Chief Marketing and Sales Office took actions during the course of our review and, therefore, this report does not contain any recommendations. Specifically, officials agreed to suspend the pilot in the San Francisco District beginning March 1, 2014 which will allow time to notify customers of the change. Officials further indicated they plan to re-initiate the program in this location when they can secure large retailers’ participation. They have initiated the Metro Post Same Day Delivery pilot in the New York District where they have large participating retailers.