Now the letter carrier will deliver groceries.
Amazon.com Inc. AMZN +2.97% and the U.S. Postal Service, already partners in Sunday deliveries, have launched a trial to shuttle insulated containers of meat, dairy, produce, and other groceries to San Francisco customers’ doorsteps. The test could presage a broader national rollout, giving Amazon’s grocery drop-off service a much wider reach.
Through its AmazonFresh unit, the e-commerce giant today delivers groceries in its hometown Seattle, as well as Los Angeles and San Francisco. It is expected to introduce Fresh to additional markets in the coming months: Amazon lists job openings for produce-handlers in Avenel, N.J., about 25 miles outside Manhattan.
If successful, the two-month test could provide a boost to the Postal Service, which has aggressively chased a bigger piece of the e-commerce pie as the Internet chips away at other parts of its business. Its package business is up 20% over the past five years to 3.7 billion packages.
The Postal Service said it is testing AmazonFresh deliveries “to determine if delivering groceries to residential and business addresses would be feasible from an operations standpoint and could be financially beneficial for the organization.”
A spokeswoman said the USPS is making the drop-offs between 3 a.m. and 7 a.m.; few of its trucks are in use at those hours. Because Amazon uses insulated tote bags for perishable groceries, the agency can make deliveries without the benefit of refrigerated trucks.
An Amazon spokeswoman said, “We are always looking for new and innovative ways to deliver packages to customers.”
Fresh grocery and meal delivery has become a hot battleground, with competition in same- and next-day service from Wal-Mart Stores Inc., WMT +0.43% Safeway Inc., Peapod LLC and startup Instacart Inc., among others. Amazon is testing its own same-day delivery network in some markets.
AmazonFresh offers more than 500,000 items, from groceries to books, videogames and paper towels, to be delivered at scheduled times or during three-hour blocks. Deliveries usually cost between $7.99 and $9.99, but are free for orders of $100 or more. A $299-per-year membership lowers the free-delivery threshold to $35 and includes unlimited shipping of Amazon.com goods.
Amazon has been leaning on the Postal Service for more of its regular deliveries, dropping off packages at local post offices for letter carriers to deliver to the door. The USPS also has an exclusive contract with Amazon for Sunday shipping in about two dozen U.S. cities, a service expected to expand to new markets in the coming months.
Sanford C. Bernstein & Co. analysts estimate the Postal Service is Amazon’s biggest carrier, shipping about 35% of its estimated 608 million U.S. packages in 2013. UPS handled about 30%, FedEx FDX +0.53% 17% and regional carriers 18%.
The 60-day grocery-delivery test started in early August, according to the Postal Service, and is limited to the San Francisco area.
In an interview in April, Postmaster General Patrick R. Donahoe said the agency would like a piece of the grocery business.
“We work with Amazon. They’re an excellent, excellent customer and an excellent partner. We’d like to deliver their groceries,” Mr. Donahoe said. “As the Postal Service, we visit every house, every day. Why not?”
By GREG BENSINGER And LAURA STEVENS Sept. 4, 2014 2:14 p.m. ET/ Source