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Amazon Looking To Abandon UPS, FedEx In Favor of Its Own Delivery Service (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: A report by The Wall Street Journal claims that Amazon is building its own shipping service to replace FedEx and UPS, giving it more control over its packages and possibly allowing it to ship packages from other retailers. Amazon has said its own delivery services would be meant to increase its capacity during busier times of the year, like the upcoming holiday season. However, "current and former Amazon managers and business partners" claim that the company's plans are bigger than that. The initiative dubbed "Consume the City" will eventually let Amazon "haul and deliver" its own packages and those of other retailers and consumers. That delivery network would also directly compete with the likes of UPS and FedEx. It makes sense that Amazon would want to sell, ship, and deliver orders on its own. The report estimates that the company spent $11.5 billion on shipping just last year, amounting to 10.8 percent of sales. The shipping process is currently a bit convoluted: packages from Amazon warehouses get sent to one of two shipping routes, either FedEx or UPS, or to a sorting facility that lumps all packages with similar zip codes together. FedEx and UPS handle its shipments and deliver them to customers, while the packages at the sorting facilities either get delivered via USPS or by Amazon employees themselves. If Amazon were to have control over its shipments over longer distances, it's estimated that the company could save about $3 per package -- about $1.1 billion annually.
First class postage is still under $1 for a letter picked up and delivered door to door, usually in a few days. It's a huge bargain if you ask me.
Of course it is. And it's a huge bargain because the USPS is operating at enormous losses, losing ~$8B per year.
What's UPS going to charge you for a letter? $10? $5?
We don't know because they're not allowed to, unless the letter is "urgent" (overnight or 2-day). I suspect that their prices wouldn't be much higher (if any) than USPS, at least for urban areas. They might even be lower. People who live in more rural areas (like me) would likely pay a bit more, but that seems fair, just part of the cost of rural living.
And then they just drop the letter off at the local post office for delivery to your door usually. Same with FedEx.
That's because it's illegal for them to use mailboxes or to deliver first-class residential mail, thanks to the government-guaranteed USPS monopoly on mail delivery.
Perhaps we could scale back delivery days and save labor costs. Say three days a week to the door and only weekday delivery to P.O. boxes? That would drop about half their labor costs, keep service levels high for those who need it, and perhaps allow the USPS to get back to even instead of loosing money all the time.
That might work. While we're at it we should eliminate the monopoly and allow UPS and FedEx to compete with the USPS on all sorts of shipping, and remove all of the remaining subsidies. Let them all compete head to head on price and convenience, on a level playing field.
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In the boonies, where many of us heat with woodstoves, snail mail spam is called "free fuel". Some of us even write letters (though I tend to print mine as my handwriting isn't great, or maybe even include a gasp - paper check - for record keeping that doesn't have bit-rot and isn't subject to hacking quite the same as e-transfers are. Selection bias much?
Why guess when you can know? Measure!