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For every Amazon package it delivers, the Postal Service loses $1.46
Published:
This is what Pres Trump is tweeting about. Article is about 6 months old.
For every Amazon package it delivers, the Postal Service loses $1.46
By: Brian McNicoll Source: Washington Examiner
"....And Amazon is happy because it has a deal that takes advantage of a loophole in the law that gives it a taxpayer-subsidized deal none of its competitors could get or match.
That's how it is that, according to a recent piece in the Wall Street Journal, "The U.S. Postal Service delivers the company's boxes well below its own costs."
Bezos can sell shipping below cost because he buys it below cost. He buys below cost because of what the Journal piece termed "an unappreciated accident of history."
The Postal Service has a legal monopoly to deliver first-class mail and non-urgent letters. It is the only entity that can put something into a mailbox or through a mail slot. It is legally obliged to provide the service at the same level and price nationwide. That means, even with mail volume down 40 percent since 2006, the Postal Service still must visit 155 million mailboxes every day.
Since 2007, the Postal Service has been required to allocate 5.5 percent of its fixed costs to package delivery and to incorporate that into its pricing. That figure made sense then, but today, 25 percent of the Postal Service's business is package delivery. And thanks to features of the Amazon deal – such as Sunday delivery, grocery delivery, even delivery from fish markets to local restaurants – the expenses have climbed.
In fact, they've climbed so much, according to a recent analysis by Citigroup, that the Postal Service should be charging Amazon $1.46 more per package than the $2 or so it does now. "Amazon now enjoys low rates unavailable to its competitors," the Journal story said. "It's as if Amazon gets a subsidized space on every mail truck." .......
https://www.washingtonexaminer.com/for-every-amazon-package-it-delivers-the-postal-service-loses-146
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