Amazon is working with the local district of the U.S. Postal Service to roll out Sunday delivery in the St. Louis region by mid-March, a move that’s expected to put additional pressure on local retailers.
The online retailer, which has been breathing down the necks of brick-and-mortar stores for years, made a big splash in November when it first announced that it had partnered with the Postal Service to make Sunday delivery of packages a reality. It launched the service in the New York and Los Angeles metro areas.
Amazon said at the time that it would expand Sunday delivery to “a large portion of the U.S. population in 2014” and said some of those new markets would include Dallas, Houston, New Orleans and Phoenix. St. Louis was not specifically mentioned.
But leaders of the local postal unions said they had been told that the target date for Sunday delivery in this region was March 16.
That’s the same date provided by David Martin, district manager for the Postal Service’s Gateway District, which covers the St. Louis region, in a recent interview with the State Journal-Register in Springfield, Ill. Martin said this region would be among the first markets outside of New York and Los Angeles to get the service.
“Seven-day delivery is now a reality for us, and that’s our future,” Martin told the newspaper.
Valerie Welsch, a spokeswoman for the Gateway District, said that she could not give out any details about the program and referred questions to Amazon. And she said Martin would not be made available to speak about the issue.
Amazon declined to comment on the launch of Sunday delivery in St. Louis. Kelly Cheeseman, an Amazon spokeswoman, wrote in an email that she didn’t have any information to share about it.
But Bill Lister, local union president for the National Association of Letter Carriers, said Sunday delivery in this region was originally set to launch this month. The delay to March, he said, was due in part to the Postal Service’s needing more time to hone its scanning procedures and to update some of the local hubs with the technology needed to download information about delivery routes.
He said that it would be the Postal Service’s lower-wage employees with minimal benefits — the “noncareer” workers whose employment is renewed on a yearly basis — who will be delivering the packages on Sunday. New employees will be hired to handle those routes, he said.
In the union’s most recent newsletter, Lister wrote that the packages would be delivered from about 15 hubs in the St. Louis region, with a goal of each carrier’s delivering about 12 parcels an hour. The estimated volume for St. Louis area ZIP codes is more than 7,000 packages for Sunday delivery.
While he is wary of the Postal Service’s increasing the ranks of these lower-wage employees, Lister said he welcomed Sunday delivery, which could help boost the fortunes of the struggling Postal Service.
“I think the Postal Service needs to embrace new forms of service,” he said. “Parcel delivery is one we gave away many years ago when UPS started. … So naturally we want a percentage of that back. It will help sustain us into the future.”
And Lister said the hope was that there would be a spillover effect from Sunday delivery. If more people are interested in that option, they will probably be ordering packages from Amazon throughout the week, too, he said.
Fred Wolfmeyer, president of the local American Postal Workers Union, which represents other postal service employees such as clerks and mechanics, echoed Lister’s sentiments.
“It’s got to help the bottom line,” he said.
As has been well-publicized in recent years, the Postal Service has been struggling financially amid the recession and the sharp decline in mail volume as much traditional mail has been supplanted by the Internet. The Postal Service has closed hundreds of branches. And last year, it flirted with the idea of getting rid of Saturday delivery altogether. But then Congress stepped in to halt that move.
The introduction of Sunday delivery also benefits Amazon, enabling it to increase pressure on competitors, said Jason Long, a St. Louis-area retail consultant with Shift Marketing Group.
“It’s a big, big deal,” Long said. “I don’t think the Earth is going to shift. But it’s just another incremental loss for brick and mortar. And I think this just helps sustain the overall movement to online ordering.”
Members of Amazon’s popular Prime membership program can already get free delivery within two days. By adding Sunday delivery, those Prime members who might otherwise have gone to a store over the weekend if they needed an item for Sunday or Monday, may be more willing to order from Amazon in those instances.
“This will take out some of those trips to local brick-and-mortar retailers,” Long said.
And there is talk that Amazon could raise the prices for its Prime membership by $20 to $40. Right now, an annual membership is $79. Long noted that adding Sunday delivery might help blunt some of the outcries about the higher membership fees and might help deflect the fact that Amazon is now charging sales tax in many states where it is required to do so.
Though this will be a clear competitive advantage for Amazon for some time to come, Long wondered whether other retailers would be able to follow suit and partner with the Postal Service for Sunday delivery.
For now, though, Amazon is it.