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 a 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.

How large the same-day segment will become remains uncertain. In fact, consumers are not yet fully embracing same-day delivery. For now, it is largely a niche market that appeals mostly to urban Millennials. We recently conducted a consumer survey which found that relatively few Americans have ever used same-day delivery. Although consumers are more open to choosing same-day delivery for urgent needs like medication, many prefer cheaper alternatives, such as in-store pickup of online orders.

The most critical observation from our survey is that many consumers are simply unwilling to pay for same-day delivery at any price — even when the fee is extremely low.

It is not solely lackluster consumer enthusiasm or awareness of same-day delivery that makes its future growth uncertain. For retailers, the logistical requirements of same-day delivery are often complex and expensive. In addition, many same-day delivery providers have built a business model that may be unsustainable, losing money with each delivery. Early same-day efforts from the Postal Service, whose delivery network is not optimized for same-day delivery, were not successful. However, this is a fluid market, and the Postal Service should continue to monitor its developments in case it develops faster, or in different ways, than currently anticipated.