The U.S. Postal Service has announced several changes to its Priority Mail service, offering free insurance and tracking and day-specific delivery of packages.
The agency is also eyeing new opportunities for growth, including delivery of alcoholic beverages.
Postmaster General Patrick Donahoe said he expects the new Priority Mail features to make the Postal Service more competitive with private package delivery services and generate more than $500 million in new revenue over the next year.
Priority Mail generated $5.9 billion in revenue in the fiscal year ended Sept. 30, an increase of 8.9% since 2010. Overall postal service revenue fell 2.7% to $65.2 billion, from $67.1 billion over the two-year period.
Postal officials said package volume has grown more than 14% since 2010, mostly due to growth in online commerce, which is expected to continue growing for the next decade with e-commerce sales expected to grow by 41% to $370 billion annually by 2017.
Donahoe is also looking for new avenues to generate revenue.
In an interview with the Associates Press, he said he believes delivery of alcoholic beverages could help the struggling agency out of its financial woes, and said delivery of spirits is on his wish list as the agency seeks ways to raise revenue.
Donahoe said alcohol deliveries have the potential to raise as much as $50 million a year for the agency, and listed shipments from vineyards made by visitors who want to ship wine home as one opportunity.
Donahoe said his agency has explored development of special boxes that would hold two, four or six bottles and could ship for a flat rate anywhere in the country, AP said. The Postal Service has seen mail volume at its ubiquitous blue boxes drop by 60% over the past decade.
“There's a lot of money to be made in beer, wine and spirits," Donahoe told AP. "We'd like to be in that business.” The Postal Service said mailing alcoholic beverages is currently restricted by law. Customers are even told to cover any logos or labels if they use alcoholic beverage boxes for shipments.
Donahoe also said he supports ending most door-to-door and Saturday mail deliveries as a way to help stabilize the service's finances.
The service's losses are largely due to a decline in mail volume and a congressional requirement that it make advance payments to cover expected health care costs for future retirees. About $11.1 billion of last year's losses were due to the health care payments, AP said.