US Postal Service Wants To Expand Amazon Grocery Deliveries

The financially struggling U.S. Postal Service wants to expand a test to deliver groceries for Amazon.com Inc., and possibly other retailers, as it seeks to compete in the package delivery marketplace.

The federal agency sought approval Tuesday for a two-year test beginning as soon as Oct. 24 to deliver prepackaged totes to doorsteps. The project would bring in more than $10 million a year in revenue to the cash poor agency, according to a filing with the Postal Regulatory Commission.

The Postal Service is in the middle of a 60-day trial with Amazon in San Francisco in which it has been delivering groceries in the early morning hours and said in the filing it hopes to develop "a long-term, scalable solution to enable expansion of customized delivery to additional major metropolitan markets across the nation,” without specifying locations. It also said it would try to add retailers as grocery delivery customers and may test other delivery times.

Earlier this month, the Postal Service slashed prices on some Priority Mail packages to compete better with United Parcel Service Inc. and FedEx Corp. for business from Amazon and other Internet retailers. Late last year, the agency began delivering packages on Sundays.

The Postal Service was established and designed more than 200 years ago to deliver letters, not packages, but the agency says that now packages are its “core function of delivery,” according to spokeswoman Sue Brennan.

The agency stopped receiving taxpayer money in 1971 and has fallen $100 billion in debt in the last decade. The one bright spot in its business is delivering packages.