Amazon (Nasdaq: AMZN) has inked a new deal with the U.S. Postal Service to provide package deliveries on Sundays, the e-commerce giant announced today, Nov. 11. Effective immediately, Amazon will provide Sunday delivery to customers in the Los Angeles and New York metropolitan areas at no extra charge. The service will be available in the rest of the country in 2014.
The Amazon partnership with USPS is sure to be a plus for customers during the holiday shopping season, but analysts also foresee the deal as a win for both companies. The Postal Service lost nearly $16 billion last year, as the volume of letters continued to drop, the result of Americans paying bills online and using texting and social media to correspond with loved ones. On the other hand, shipping services and package deliveries continue to increase, largely due to the growing popularity of online commerce. In 2012, the number of packages delivered rose to 3.5 billion, from 3.3 billion in 2011 and 3.1 billion in 2010.
USPS declined to comment on how much additional revenue the new deal is expected to bring, but the service is predicted to boost work considerably and take away some business from competitors United Parcel Service (NYSE: UPS) and FedEx (NYSE: FDX), which do not deliver on Sundays.
"We're excited that now every day is an Amazon delivery day and we know our Prime members, who voraciously shop on Amazon, will love the additional convenience they will experience as part of this new service," said Dave Clark, Amazon's vice president of worldwide operations and customer service in a statement.
To accommodate Sunday delivery for Amazon, the Postal Service does not plan to add employees, but will use flexible scheduling of existing employees, USPS spokeswoman Sue Brennan told the Los Angeles Times.
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