RISC Report: Same-Day Delivery Implications for the U.S. Postal Service

Same-Day Delivery

Same-day delivery once meant bicycle couriers bringing important documents from Point A to Point B.

However, the same-day delivery market has fundamentally transformed in recent years.

Consumers can now place an online order for groceries, medicine, electronics, and any number of other goods for delivery that day.

This is partly due to the rise of crowdsourced delivery platforms that connect independent drivers with customers placing orders.

If same-day delivery grows at or above the current rapid pace (up to 50 percent annually), it could disrupt last-mile delivery as we know it.

This could have tremendous implications for the U.S. Postal Service and other traditional carriers.

Yet, same-day delivery’s current volumes do not appear to be a significant threat to the Postal Service’s own parcels volume at this time.

We conducted research and estimated that same-day delivery of merchandise and groceries to consumers represented 249 million packages in 2018, which is only about 2 percent of all domestic parcel deliveries.

The market is dominated by crowdsourced delivery companies, and major online retailers have started to acquire or develop their same-day delivery capabilities.

Report Highlights

1. Although it is a rapidly growing market, same-day delivery of merchandise and groceries to consumers remains relatively small - 249 million packages in 2018, which was only 2 percent of the total domestic parcels market.
2. Beyond a core of enthused urban Millennials, many consumers are unwilling to pay for same-day delivery at any price. If they are interested at all, it is mostly for urgent needs like medications or groceries.
3. The business model used by some major same-day delivery providers may be unsustainable because it loses money with each delivery.
4. There are indications that next-day delivery will be a more critical segment than same-day delivery. That would be consistent with the Postal Service’s established role as an important provider of next‑day delivery through offerings like Parcel Select Destination Delivery Unit (DDU).