The U.S. Postal Service will end a same-day delivery experiment in San Francisco by March 1 after it couldn't find enough retailers to participate and got only $760 in revenue, the agency's inspector general said.
Only 95 packages were sent by six participating retailers over a five-month period, far fewer than the 200-a-day target, the Office of Inspector General said in Feb. 5 report made public Friday. While saying the agency didn't implement the program properly, the report faulted the inability to get large retailers to take part in the program.
"The Postal Service was left with small local retailers that could not produce the target daily package volume," the report said.
The Postal Service started the program, which it has since introduced in New York, to help it compete with FedEx. and United Parcel Service for delivery business with online retailers. The service has been looking for ways to compensate for a steady decrease in the volume of first-class letter mail, its most profitable operation.
The plan was for customers to order products online or via smartphone by 2 p.m. and then get the delivery before 8 p.m.
Success depended on reaching agreements with six large retailers in the San Francisco Bay Area. Instead, only one signed on and later withdrew due to other "operational priorities," according to the report.
The Postal Service is getting more cooperation from large retailers for its pilot program in New York, according to the report.
It wasn't the most-expensive idea: the Postal Service incurred costs of $10,288, for a net loss of $9,528. Earlier Friday, the agency reported a first fiscal quarter loss of $354 million. It's lost money in 19 of the past 21 quarters.