Dive Brief:
- The U.S. Postal Service will change how it handles Amazon packages during the upcoming holidays to prevent overload at its processing hubs, Deputy Postmaster General Douglas Tulino said during the agency's board of governors meeting Thursday.
- To improve efficiency, Postal Service operations at the ZIP code level will handle Amazon deliveries independently during peak, rather than having the packages go through larger area hubs for distribution, Tulino said.
- Tulino didn't specify if the agency had taken this approach during previous peak seasons, but a 2023 Postal Service memorandum noted that local delivery units would accept Amazon orders "in a decoupled structure" on certain days.
Dive Insight:
While Amazon delivers many orders through its in-house fulfillment network, it also hands off packages to the Postal Service and UPS in some cases. Amazon works directly with the Postal Service to balance its delivery needs with the agency's available capacity, Amazon spokesperson Steve Kelly said in an emailed statement.
"We recognize that like us, other major retailers, small businesses, and the communities they serve rely on the local USPS to deliver, which is why we collaborate on package volume each week and logistical changes meant to improve the customer delivery experience," Kelly said.
Even just a sliver of the e-commerce giant's volume can challenge a carrier's network capacity, particularly when order activity spikes during the holidays. The Postal Service aims to mitigate that risk during the 2024 peak season by having Amazon deliveries bypass the standard distribution process.
The agency is also tweaking its operations in other ways to improve its holiday performance.
Tulino said the Postal Service will work to deliver many packages between 6 a.m. and 9 a.m. during peak, an approach it has taken in previous years, to reduce couriers' workloads on their standard delivery routes. Additionally, the agency has nearly tripled its daily package processing capacity since 2020 to 60 million, helping speed up the flow of volume, according to a news release last month.
"Our operational, transportation and delivery processes have never been more finely tuned, and I am fully confident in our ability to once again handle the peak holiday season surge," Postmaster General and CEO Louis DeJoy said in the announcement.
Last year, the Postal Service's Priority Mail and Ground Advantage services fell short of their on-time performance targets. The agency cited operational changes amid its network overhaul, severe weather and unexpected facility closures as major culprits.
