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Amazon's Sunday delivery to spread next year

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E-commerce giant Amazon will provide Sunday package delivery at no extra cost in two key cities and plans to expand the program dramatically next year.

Kelly Cheeseman, an Amazon spokeswoman, didn't say whether Baltimore would be included in that expansion. But she said the company expects "to roll out this program to a large portion of the U.S. population in 2014."

Sunday delivery is set to launch this week in New York and Los Angeles, the nation's two largest regions. The U.S. Postal Service will deliver the packages, perhaps throwing a lifeline to the struggling government-owned mail carrier.

Logistics experts and economists say it makes sense for Amazon to at least consider Baltimore as it expands the service next year. It's the country's 20th largest region, with about 2.7 million people. And Amazon plans to open a 1,000-worker distribution center in Southeast Baltimore next year.

Marc Wulfraat, president of MWPVL International, a global supply chain and logistics consulting firm in Montreal, figures Amazon will roll out Sunday delivery based on population density and its own infrastructure. Baltimore's planned distribution center would give it an edge, he said.

But he's not sure the region is big enough to make the math work for Amazon, because delivery costs are largely determined by the number of orders per truck.

"There would have to be a whole pile of us people ordering for a Sunday delivery to make this work," Wulfraat said. "That's why you see them starting in L.A. and New York. … As the market size drops in terms of population density, there's a much lower probability that they would be able to pull this off."

Economist Anirban Basu thinks Amazon will look at the area not as Baltimore but as Greater Washington — the fourth-largest region in the country — and expand Sunday service here quickly.

"I think Washington-Baltimore is big enough to work," said Basu, CEO of Sage Policy Group, a Baltimore economic and policy consulting firm.

Members of Amazon's Prime program have free two-day shipping and, under the new deal, could order items Friday and receive them Sunday. Customers without Prime will pay the standard shipping costs associated with business day delivery.

The deal is good news for the struggling postal service, which has seen growing financial losses with a decline in letter mail volume and a federal requirement to pre-pay retiree health costs.

The United Parcel Service does not deliver on Sundays, and FedEx has limited Sunday package options.

The deal with Amazon will strengthen the postal service's existing but small Sunday package delivery business. Postal officials see value in expanding there, even as they pushed to reduce general mail delivery to five days a week.

Sue Brennan, a spokeswoman, said that letter mail volume is declining "so extremely," yet package volume is "increasing in double-digit percentages."

To pull off Sunday delivery for Amazon, the postal service plans to use its flexible scheduling of employees, Brennan said. It doesn't plan to add employees, she said.

The American Postal Workers Union cheered the deal.

"We think the postal service should be expanding and enhancing its services in many respects so it can continue to remain relevant in the digital age," said Sally Davidow, a union spokeswoman.

Amazon offers same-day delivery in some markets, and competitors are giving that a try. Wal-Mart Stores, for instance, is testing same-day delivery service in Northern Virginia, Philadelphia, Minneapolis, Denver and the San Francisco and San Jose region.

Wulfraat suspects retailers now will feel pressured to do Sunday delivery, too.

"Whenever somebody out there raises the bar, everybody's got to follow — whether they like it or not," he said.

McClatchy-Tribune News Service contributed to this article.

krector@baltsun.com

jhopkins@baltsun.com

Copyright © 2014, The Baltimore Sun
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