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WSJ Op-Ed: The Post Office Is Delivering Amazon's Packages Below Cost (zerohedge.com)
schwit1 shares a pay-walled op-ed from the Wall Street Journal (also excerpted at the URL below):
The U.S. Postal Service delivers the company's boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon... First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver...
My analysis of available data suggests that around two-thirds of Amazon's domestic deliveries are made by the Postal Service. It's as if Amazon gets a subsidized space on every mail truck... Congress should demand the enforcement of the Postal Accountability and Enhancement Act, and the Postal Service needs to stop picking winners and losers in the retail world. The federal government has had its thumb on the competitive scale for far too long.
My analysis of available data suggests that around two-thirds of Amazon's domestic deliveries are made by the Postal Service. It's as if Amazon gets a subsidized space on every mail truck... Congress should demand the enforcement of the Postal Accountability and Enhancement Act, and the Postal Service needs to stop picking winners and losers in the retail world. The federal government has had its thumb on the competitive scale for far too long.
Doesnt sound to different to net neutrality honestly...
It makes a big difference.
It's normal buisness to price marginal goods based on marginal costs + profit. Average cost includes sunk costs. The truck and postman are already going, not taking the UPS handoffs won't save a penny (which is what's going on, the whole 'Amazon' part is just clickbait).
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
What really is galling is that many deliveries are made on Sundays... I've seen USPS delivery trucks going to my neighbors at both our regular residence and at our seasonal residence, on Sundays to deliver *just* Amazon packages. I often wondered how much money the USPS was making off of that kind of sweetheart deal, and now I know... We The People are subsidizing Jeff Bezos, Inc. and our normal USPS services are suffering for it.
There is no rational reason that costs should be allocated equally across all classes of mail. Delivery of first class mail is the whole point of the USPS, and it is illegal for private companies to provide an equivalent service. If not for first class mail, there would be no reason to even have a post office, since there are already private alternatives for all other classes of mail. So it makes sense for FCM to bear the brunt of infrastructure costs.
Disclaimer: I believe that the historical need for FCM is obsolete and the USPS should be fully privatized. Packages should be delivered by UPS and FedEx, bills should go by email, bulk mail advertising should disappear forever.
>subsidize...
You are forgetting the benefit to many for having the option of first class delivery to everyone, everywhere. E.g. if you want to correspond with (or sue) someone off the grid in bfe.
Like many close observers of the shipping business, I know a secret about the federal government's relationship with Amazon: The U.S. Postal Service delivers the company's boxes well below its own costs.
Because the USPS is a government-funded charity with Amazon as the beneficiary? Because Bezos secretly owns the Post Office? Because Putin? Because ISIS? Is there any basis for this claim, or do we just have to accept it based on some random blogger's say-so?