Can Groceries Save the USPS?

In an effort to forestall its collapse, the Post Office is experimenting in San Francisco.

Matt Rourke/AP

Spitballing ideas to head off the looming death of the United States Postal Service is a national pastime at this point. Should the aging institution embrace 3-D printing? Have its trucks install sensors to collect data? Slash Saturday delivery? Offer basic banking services?

Meanwhile, the deck chairs on the S.S. USPS continue to be reshuffled. Sunday delivery has been revived through an alliance with Amazon. To the chagrin of postal workers, in-store partnerships with Staples are being forged. And now, the postal service is exploring the idea of grocery delivery.

As The Washington Post reported, the Postal Regulatory Commission has signed off on a trial plan that would have the USPS "deliver groceries in San Francisco as part of a test project" that will last about two years and could expand into a national program. In essence, the trial would be an expansion of an existing collaboration between the USPS and Amazon, but with other retailers involved.

Federal law prevents the postal service from gaining an “unfair or otherwise inappropriate competitive advantage … particularly in regard to small business concerns.” According to The Post, the pilot program's revenue would be capped at $10 million.

David Williams of the Taxpayers Protection Alliance is pretty unequivocal in his opposition to the plan, and told me that the new program is "disconcerting" because it will most certainly hurt businesses, especially those that delivery groceries. "Whenever the government competes with the private sector, we're concerned," Williams said.

Williams pushed back against the commission's claim that there is "no reasonable expectation" that the entrance of the USPS into the grocery delivery game wouldn't disrupt the market. "They're competing directly with Pea Pod and other grocery services and using government vehicles to do it," he added.

Despite the opposition, there's already one curious aspect of the new program that seems to make it destined to be unpopular:

Customized Delivery is a package delivery service offering that will provide
customers with delivery of groceries and other prepackaged goods, primarily during a 3 a.m. to 7 a.m. delivery window.

I guess that's one way to make sure a customer is home when their packages arrive.