The U.S. Postal Service has announced that it will deliver groceries on a test basis for Amazon. In doing so, the world’s largest mail delivery service is deepening its relationship with the influential e-commerce provider. So much for drone delivery. Amazon’s (AMZN) Jeff Bezos has the USPS, which handles 40 percent of the world’s mail and visits every address in America six days a week, now delivering packages for the Everything Store on Sundays, too.
The news comes just as the USPS is entering a new period of tension with its chief competitors in the parcel space, UPS (UPS) and FedEx (FDX). The USPS is lowering its parcel delivery prices at a time when the private guys are preparing to raise theirs. Clearly, UPS and FedEx fear that the USPS will siphon away their customers. The deepening relationship with Amazon virtually guarantees that. The e-commerce giant was miffed last December when UPS and FedEx misjudged the volume of holiday packages and ended up getting many of them to customers after Christmas.