The Wall Street Journal reports that CVS Health has made a deal with the US Postal Service (USPS) “ to pick up prescriptions at CVS stores and bring them to customers’ homes in one or two days. Customers will be charged $4.99 per delivery, which could include over-the-counter products such as aspirin or face wash.”
According to the story, “CVS is rolling out the nationwide service as it fights falling sales in its roughly 9,800 pharmacies and braces for potential competition from Amazon, which has considered launching a prescription offering and has made a bigger push into medical supplies. CVS is also facing competition from venture-backed startups like PillPack Inc. and Capsule Corp., which provide home delivery of medicines.”
The Journal goes on: “Amazon relies on the Postal Service to deliver about half of its U.S. packages every day, according to analysts’ estimates. The service Amazon primarily uses requires the shipper to sort its packages by ZIP Code and postal route, and drop off the parcels at the closest post office for delivery. Letter carriers bring the boxes to recipients’ doors.
“CVS, by having the Postal Service pick up packages at stores, will avoid the logistical challenge of getting packages to the post office. Still, the Postal Service’s network was built for letters, not parcels. The deal also comes at a time that President Donald Trump has criticized the quasigovernmental agency’s dealings with Amazon and launched a task force to examine its finances.”
According to the story, “CVS is rolling out the nationwide service as it fights falling sales in its roughly 9,800 pharmacies and braces for potential competition from Amazon, which has considered launching a prescription offering and has made a bigger push into medical supplies. CVS is also facing competition from venture-backed startups like PillPack Inc. and Capsule Corp., which provide home delivery of medicines.”
The Journal goes on: “Amazon relies on the Postal Service to deliver about half of its U.S. packages every day, according to analysts’ estimates. The service Amazon primarily uses requires the shipper to sort its packages by ZIP Code and postal route, and drop off the parcels at the closest post office for delivery. Letter carriers bring the boxes to recipients’ doors.
“CVS, by having the Postal Service pick up packages at stores, will avoid the logistical challenge of getting packages to the post office. Still, the Postal Service’s network was built for letters, not parcels. The deal also comes at a time that President Donald Trump has criticized the quasigovernmental agency’s dealings with Amazon and launched a task force to examine its finances.”
- KC's View:
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The thing about using the Post Office is that the delivery infrastructure exists, but CVS knows that it doesn’t want to get into the pharmacy business. So this is a smart alliance.
These are the kinds of deals that the USPS has to make if it is going to achieve some level of sustainability. Other changes have to be made - like changing the pension recognition requirements imposed upon the Post Office by the US Congress, which put it in an untenable position.
