Dive Brief:

• The U.S. Postal Service said Tuesday it has launched a next-day delivery service geared toward local businesses shipping within their community. The new service comes as carriers vie for a larger share of parcel volumes from small shippers.
• USPS Connect Local is currently available in more than 800 Texas locations and will be live in all 50 states by the end of September, said Steve Monteith, USPS chief customer and marketing officer and executive vice president, during a press briefing. It also offers same-day and Sunday delivery at select locations.
• The launch gives small businesses access to the same capabilities that USPS has provided to larger shippers over the years, according to Monteith. Rates for Connect Local are available on USPS' website.

Dive Insight:

USPS is looking to capture more business from small- and medium-sized shippers in a time of increased interest in the segment among parcel carriers. Unlike large shippers, SMBs don't come with massive volumes that could unsteady a delivery network and are generally more profitable for carriers on a per-package basis.

Monteith said USPS Connect, the new program which Connect Local is part of, is "really about selling solutions for these businesses — a medium-sized business, a small business, a micro business."

Small shippers are trying to keep up with the acceleration in e-commerce demand and rising consumer expectations on delivery speeds just as much as their larger counterparts. According to a survey of 500 enterprise retailers commissioned by Bringg, 63% of U.S. respondents already offer next-day delivery and 26% offer same-day delivery in an effort to match consumer expectations.

USPS Connect Local is particularly suited toward local businesses wanting to provide next-day and same-day delivery in their area, said Jakki Krage Strako, USPS chief commerce and business solutions officer and executive vice president, during the briefing. For same-day delivery through Connect Local, a business needs to bring its packages to the local post office between 5 a.m. and 7 a.m., she added.

"Businesses with a customer base in their ZIP code or ZIP code served by their post office will find this solution extremely beneficial," Strako said of Connect Local.

To process and deliver local shipments quickly, USPS is using a new operational model for Connect Local. A Connect Local package stays at its local post office for processing and delivery, bypassing the extra step of being transported into the USPS plant network, Strako said. This allows packages to be delivered by the next day, rather than going through a two- to three-day delivery process.

"Operationally, we are having a savings there and we're passing that savings along in our affordable pricing for the customer," Strako said.

USPS piloted Connect Local in Texas because it allowed the agency to test its capabilities in a range of urban, rural and suburban settings, Monteith said. He added that USPS targeted areas where it "had opportunity in terms of number of small businesses" for the national Connect Local rollout, and the agency plans to offer the service in more than 3,400 locations by Sept. 30.