Slashdot Mirror
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.
Same thing goes for all those packages from China. the USPS should at least break even not favor some over others!
Doesnt sound to different to net neutrality honestly...
All of us always support services that we do not use or rarely use. I send maybe one letter a year by snail mail. Why should I support a post office at all? The idea that first class mail supports the entire postal system is sort of warped. Sending packages already costs all of us too much money. I would hate to even know the sums that Amazon and Ebay spend on shipping. Those shipping charges are passed on to the buyers in the product costs.
They use them all. I get USPS delivered amazon stuff all the time. It sucks because the mailman can jsut put it in my mailbox (live in a condo, mailbox is detached), but everyone else has to deliver to the door.
Good-bye
If you can't complete with Amazon, FAIL ALREADY! We don't need no education! We sure don't need no thought control! Because, if you don't eat your meat, how can you have any pudding? How can you have any pudding if you don't eat your meat!
Depending on where you live, Amazon will ship your package most of the way by ups, with the final delivery being made by usps.
The important quote from the article:
An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver.
So this has nothing to do with Amazon specifically, but with:
Mr. Sandbulte is co-president of Greenhaven Associates, a money-management firm that owns FedEx common stock.
zerohedge and schwit1 are posting this because they don't like Jeff Bezos' Washington Post. EditorDavid posted it most likely because it will bring ad money, and slashdot stopped being news for nerds a decade ago.
I've gotten numerous Amazon packages via USPS.
How do you get something shipped by USPS?
Check out UPS Mail Innovations. FedEx and DHL have similar offerings. The delivery is made by UPS, etc., to your local Post Office. The local Post Office delivers the package to you.
The funny thing is that USPS doesn't deliver to my door. I have to go to the post office to pick up my mail. I got Prime thinking a Amazon would deliver to my door via UPS or FedEx. Since they deliver through USPS now, this makes Prime a bad deal for me, and I think I may cancel it soon.
(T>t && O(n)--) == sqrt(666)
With UPS the service is called SurePost and Fedex is SmartPost. Pickup is by UPS/FedEx and delivered to the local USPS where USPS does the final delivery.
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'
Why does it matter that it's Amazon? Unless EVERY individual transaction is profitable, across all levels, someone will be "taxed" to pay for someone else's "subsidy." This is extremely obviously clear in the case of (relatively zero-sum) governments, but it's also the case in corporate transactions. If I lose money on a business transaction, that loss needs to be covered (subsidized) by the profitability of another transaction (tax.)
Businesses should be free to decide if they want to lose money on transactions (loss-leaders, market share grab, whatever...) but whenever a government is involved this, it becomes a bit less clear. Still, the Post Office is probably one of the best run Federal agencies, sitting on the least shaky financial ground. I'm inclined to say "Who cares? Let those running the post office decide how to run the Post Office. They're doing a pretty good job."
and in my experience it cost the same as the USPS but add's 4-5 days to delivery *fuckin mouser
the only thing we get from amazon via the usps is if it fits in a bubbleope, so they can stop their bitching about loosing money on boxes
UPS and FedEx uses the USPS as final delivery. SmartPost is FedEx. FedEx hands off the package at a USPS hub. Then the USPS delivers it to my PO. Amazon does not use USPS directly in my area. Secondary sellers use USPS but not Amazon. In my 20 years of ordering from them I have never received anything directly through the USPS.
I live in the US midwest and I'd say 99% of my Amazon packages come via USPS (primary, not smartpost or such)
I browse on +1 so AC's need not respond, I won't see it.
I'm assuming you live in a major city. Amazon uses a collection of their own delivery services, contract third party providers like Lasership and XPO, normal delivery companies like UPS and FedEx (both traditional and last mile by the postal service, ala SmartPost), and plain old USPS. If you live in a rural area, you almost only see UPS or USPS, because they are typically cheapest. The fact that you have real Amazon delivery people says you not only live in a major metro area but that you live in a wealthy one.
They optimize for cost, and since they're still using UPS and FedEx in many cases, that means the USPS costs are higher than these privately run companies.
I think the article is overstating the case, accounting is a somewhat subjective endeavor, and USPS rates make profit on some runs while taking a loss on others - putting the whole Amazon.com postal load on First Class mail is a gross oversimplification.
Guess some B&M stores decided to step up their lobbying and PR efforts.
I browse on +1 so AC's need not respond, I won't see it.
> It's almost as if a fedraly funded and fedraly regulated government agancy does a job better
Nope. I hate it when stuff gets sent to me snail mail. I never know when it's going to take a strange unexplained vacation to one of the coasts for a week or two.
Letter delivery also sucks. Half the time stuff doesn't go to the right house. It really makes you wonder about important and sensitive things.
If I could deselect USPS from my shipping options at Amazon, I would do so. I would pay extra to avoid the potential hassle.
A Pirate and a Puritan look the same on a balance sheet.
Most Amazon packages come through UPS or an Amazon employee. What packages does Amazon even ship using the post office?
I'm a Prime member, and I get stuff from Amazon via the Postal Service all the time. ... and it sucks. I suspect that AMZN delivery contracts with off-duty USPS drivers here in the Puget Sound region, because I get the same crappy level of "service" from both.
Case in point. I ordered a phone case from Amazon, who shipped it USPS. It was supposed to come yesterday. It was supposedly out for delivery - then I got an Amazon email (not for the first time) saying "Sorry we missed you. We tried to deliver your package" - remember, we're talking about a cell phone case - " but you weren't home".
"Not home"... for a delivery which would have been left in my mailbox right on the street. Oh, and there was no other mail in the box either. And no "missed delivery" slip at my door.
It'll be there today, I'm sure. The Saturday post lady is not the same one as the Friday post lady. This actually happens a fair bit with stuff that's supposed to be here on Fridays.
#DeleteChrome
Tax payers have been subsidizing the postal service and package delivery for many years. It has always been a bad idea. What's the difference if Amazon is now the main beneficiary, instead of Sears or any of the previous mail order businesses?
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.
Why don't you go full on fearmonger if you are going to cite zerohedge?
Retired Green Beret Warns: "There Could Be A Nuclear Strike Against The US Coming Soon"
That was "news" from just yesterday.
Stop using zerohedge because that site is tabloid garbage.
Anons need not reply. Questions end with a question mark.
You're unique, I assure you. If you lived almost anywhere else, you'd be receiving packages by USPS. There are thousands of complaints about USPS deliveries on Amazon forums.
Out of 66 packages from Amazon this year, 60 of them have been delivered by USPS from start to finish, no SmartPost or SurePost. Nearly all of them were sold by Amazon and fulfilled by Amazon. It's a rare event when I receive a package from Amazon by UPS or FedEx.
I'm luckier than most because I have a very good post office in my city. The packages that are too big for the mailbox are left in my car (so they'll be out of sight). Plus, USPS here delivers on Sunday before lunch!
The story focuses too much on Amazon. It is a postal pricing policy that applies broadly. The fact is that if the post office has mispriced the service, it has done so for all participants, not just Amazon. This is done all too often by news outlets to pump up eyeballs on the story.
Sure, the Post Office should price its services correctly. But how do you know if it is wrong? Marginal cost is hard to estimate when you are driving the route already. And if the post office changed its pricing, it could well be that a different package last-mile business would step in. The post office is staffed with union employees, and it could be possible to beat the post office's last mile service on price if the price was raised $1.50 a package.
My stuff from Amazon comes about 75% USPS and 25% UPS.
A few years ago, Amazon used a few different local or regional carriers (can't even remember their names now) but it was only over a pretty short period of time too.
More than once, our not-too-bright mail carrier marks a package as not deliverable and the reason is "receptacle blocked". That's odd though 'cause they put multiple letters, magazines, etc, etc in the same mailbox on the same day they tried to say it was blocked !! My guesses are either a) they forgot to load the package in their truck or b) it wouldn't fit in the mailbox, meaning they have to get out of their car, walk 40' to our door, knock, and hand it to someone. My money is on "b"....
UPS will often deliver to the USPS for final delivery. Amazon Prime items usually don't come through USPS but plenty of third party resellers will.
Custom electronics and digital signage for your business: www.evcircuits.com
In my neck of the woods UPS will be more than happy to never ring the door bell and simply put a sticky note on your door saying they left it at some corner store somewhere in the hood the next day. Try to get a corner store to deliver your package? They will simply tell you they don't have it and because it's a "UPS store" it will sit for 2-3 months before UPS agrees that it's been lost.
Luckily Amazon Prime items will simply be replaced but some third party resellers don't want to keep sending their stuff for free.
Custom electronics and digital signage for your business: www.evcircuits.com
Wait 2 years, the current congress is a shitshow. and I am betting the "calculations" are really far off and in reality there is a "nothing to see here".
Do not look at laser with remaining good eye.
In our case, that "b" explanation wouldn't work - we have a large mailbox. The smaller Amazon boxes fit in it just fine... for the Saturday post lady.
#DeleteChrome
I still get stuff from regional couriers occasionally but its usually UPS and less often USPS.
On the Oregon Cost born and raised, On the beach is where I spent most of my days
The USPS is the delivery service of last resort. In some out of way places, it doesn't make sense to have more than one delivery service for the last leg of the trip. Also as a country, we've decided that it was worthwhile for our postal system to subsidize the US locations that are remote and that do not get much mail traffic at all.
Also, the article used the fixed costs of the post office to arrive at its final figure of what a fair share would look like. But of course, those fixed costs won't change even if Amazon stopped using the post office for those packages. And also what the journalist doesn't seem to understand is that Amazon is under no obligation to be fair, and so even if we demanded that Amazon tripled its cost for shipping packages to places like Alaska or Wyoming (States with low population densities), or for shipping packages to places away from major population centers, Amazon would just pass on that extra cost to its customers and the affected customers may just decide to order less or find an alternative retailer/delivery service (which won't help the USPS either way).
In the end, what this person is really worried about is the purchase of Wholefoods Market by Amazon and that Amazon may capture the upper end of the grocery market with its Amazon Fresh/Now deliveries (mostly in rich enough and dense enough markets that can support it) and that it may capture the lower end of the grocery market with its unmanned pop up stores/kiosks that are opened 24 hours a day / 7 days a week. But personally, whether Amazon is the one to take over those markets or not, I have no idea, but whether it's them or someone else, if I worked in a grocery store, I would certainly be worried about losing my job (or getting a demotion) within the next 3 years, and I would either go into the kiosk repairing business, or I would look into other types of jobs.
It contains tons of misinformation and poor financial speculation. Most of the people there have no clue how the financial system works but they are all experts I assure you. Good for a laugh every now and again. Watching them completely get JPM's silver trades wrong a few years ago was good times.
"My analysis of available data suggests that around two-thirds of Amazon's domestic deliveries are made by the Postal Service."
If your 'available data' is 6 months old, than your 'analysis' is outdated. Amazon does not sit still. This year (the last 6 months) all the deliveries to my building (44 units) have been by Amazon employed drivers. Even my hot pizza was delivered by an Amazon driver. In the past there was a mix of UPS & USPS, mostly USPS.
However you can expect USPS to continue to handle rural deliveries, and possibly at a financial loss.
...omphaloskepsis often...
Here's the problem with your suggestions. 1. Eliminate Saturday delivery - Fine, but if you're not delivering to residential then businesses need to bite the bullet as well. In this area for years residential have had to wait for their packages because they deliver to businesses first. Meaning: They could go right by my house 2-3 times in a morning and I'd have to wait until the afternoon. For some reason the idea of a straight line doesn't apply anymore. Businesses should get no special treatment. 2. Eliminate direct door-to-door delivery in favor of mailbox clusters - Again, fine. Then they're doing it everywhere and not just lower income neighborhoods. They had a discussion about that in Iowa last year. And sure enough, the businesses and middle to upper class areas were exempt. "They tend to get more packages from places like Amazon. It would be a burden if they had to go to the post office to pick them up." 3. Eliminate the`requirement to fully prefund employee retirement health benefits - You do realize the Post Office is actually a privately owned company which just has a continual contract, right? This is one corporation you don't want screwing people out of their benefits once they retire. They should have the same protection as police officers and firemen do. (Wait...*looks at latest news about Chicago*...maybe I should rephrase that.) 4. Eliminate subsidized rural delivery - Again, all or nothing. Meaning no exceptions for corporate farms, cattle ranches, or CEO country estates getting deliveries from Amazon. (See #2) 5. Allow the shipment of alcohol and marijuana in compliance with state law - While we're at it, let's let Rush Limbaugh get his pill-of-choice delivered to his doorstep as well. (Of course, make sure it wasn't mailed from Canada.) You know what would really save money...Delivering the mail like they used to decades ago. A huge van would carry several carriers and drop them off, one at a time, at the end of the block. The postmen would walk one side of the street, cross it, and then work their way back. The van then would deliver any packages within that area before picking the postmen back up. One large vehicle rather than several individual ones. The only time you use the smaller ones is during inclement winter weather. This was cost effective from a mechanical point of view. As well as a way to make sure carriers weren't just sitting in their vehicles reading the paper while on the clock.
Care killed the cat, but satisfaction brought it back.
Zerohedge is CNN level fake news, but it's just an associated bit of link farming. The story is in the WSJ.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
3. Eliminate the`requirement to fully prefund employee retirement health benefits - You do realize the Post Office is actually a privately owned company which just has a continual contract, right? This is one corporation you don't want screwing people out of their benefits once they retire. They should have the same protection as police officers and firemen do. (Wait...*looks at latest news about Chicago*...maybe I should rephrase that.)
Both you and the parent don't understand the exact nature of the prefunding problem. Congress has been requiring the USPS to prefund the next 75 years worth of benefits over a ten year period. That means they have to "fully fund" benefits for decades of employees they don't even have yet, over a far shorter period than is remotely reasonable.
No one is going to read your wall of text.
Break up your text into paragraphs.
The real "Libtards" are the Libertarians!
My family owns a weekly newspaper that is delivered via USPS. We routinely would have put of state subscribers receive multiple issues at the same time. In some cases as many as five weeks worth tied together.
Eventually we figured out they didn't have a consistent mail carrier. The substitute carriers didn't want to carry the weight of periodicals so they left them at the office. Eventually there were too many and some poor sap had to deliver all of them.
Unfortunately their crappy service made us look bad (people had a hard time believing that we send all of the papers at the same time)...
I apologize for that. I actually DID have it broken into paragraphs but it posted it that way. This is a double spaced new paragraph. But for some reason it won't post that way.
Care killed the cat, but satisfaction brought it back.
Look for the drop-down box below the box in which you write your posting. It probably has "HTML Formatted" selected. Change it to "Plain Old Text".
The real "Libtards" are the Libertarians!
I don't know about the US but in Canada I will mainly get my stuff delivered via Canada Post or UPS. It all depends on what method is cheapest for that particular parcel. Usually the bulkier and heavier stuff shows up via UPS and the rest is Canada Post.
Amazon is not the problem - as noted in the article EVERY parcel USPS carries is subsidized by 1st class postage.
"An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver... "
It isn't just parcels from Amazon that are subsidized, it is also the birthday present you send your nephew or the item you bought from an eBay seller and every other package shipped via USPS.
Ken
Order something small. Things that only weigh a few ounces and can be shipped in a padded envelope will go by USPS because it's cheaper for packages like that. (If you have Prime they'll only go by USPS if they can offer two day delivery from an Amazon warehouse that stocks the thing you ordered.) Paperback books, optical discs, small electronic parts... things like that.
See this: http://fortune.com/2015/03/27/us-postal-service/. Among other things, the USPS is exempt from state and local taxes.
Contribute to civilization: ari.aynrand.org/donate
Here's more great stories: Deus Ex Alpha Centauri: Buy Euros Now As SETI May Have Discovered Aliens"
Environmental Nightmare! Dozens Of Highly Toxic Substances Have Been Found In Tap Water All Over America
The End Of The Cycle: "Government Will Gladly Enter War To Cleanse The Balance Sheet And Cull The Herd"
Around here the mail service is spotty, but Amazon uses mail and UPS about fifty-fifty.
No they have not, that is a lie put out by the postal union. Go read the 2006 law requiring the funding set aside and the US public law dealing with government personnel and funding.
The 75 years is a requirement for ALL government agencies and it is for for accounting planning. It is the way the government plans if they will need buildings, personnel,etc.
What the 2006 law required to the postal office to do is start to set aside money to ensure that they can provide the benefits that they obligated themselves to for employees. The USPS use to pay for health care was to just pay out the requirement amount each year, the 2006 law required them to start setting aside money to make sure they could meet those obligations. The law makers in 2006 saw that there was decreasing need of the post office and they would have issues providing the funds in the future so they required them to start setting aside money to pay that need. Why do people have an issue with making sure that employees get what they were told they would get?
It sucks because the mailman can just put it in my mailbox (live in a condo, mailbox is detached), but everyone else has to deliver to the door.
Sure beats FedEx refusing to leave stuff unless I'm home to sign for it when they come -- in the middle of the day, when, like their drivers, I am also at work. Even better, there is no FedEx distribution center in my city like there is for UPS. So a "local pickup" requires a 45 minute drive.
Zerohedge.com is a right-wing opinion wank, not a- oh. Wall Street Journal. Whom have a paywall and - right, carry on.
UP here, UPS won't deliver it to the UPS store without the shipper's permission so instead they fail to deliver and then demand I drive to their depot and pick it up which is right around where I tell them I don't own a car and will not ride the bus for 1.5 hours each way to to get it so they can just go ahead and return it.
Odd I got a shipment from Amazon on friday via USPS in my mailbox. Happens all the time.
My wife and I run a small business (we sell a modest number of laser-cut models online). The cost of shipping our product is about 30% of our sales price - so we must work hard to minimise postage charges. USPS is vastly cheaper than UPS/FedEx/etc...and we avoid USPS "Flat Rate Shipping" because it's three times the price of doing it the traditional way. We always tell the post office desk staff "Ship the cheapest way possible" (no tracking, no insurance, no nothing) because the number of "shipping failures" is negligible and paying for these items isn't cost-effective.
But some of the ways USPS operates are ludicrous. We COULD do all of our shipping work online and just drop the packages off at the post office - but they charge MORE for doing that than handing a pile of ~100 packages to the desk clerk and waiting for them to painstakingly enter the Zip code for each one - then stick THREE labels onto each envelope and finally, use a little rubber stamp to mark them "First Class". I try to go to the post office when there isn't a long line ahead of me - but you can be 100% sure that when I'm done, a long line has built up behind me. I'd be in and out in under a minute if they didn't charge me so much for doing the work for them! But spending 40 minutes watching the desk while they do all of this is very cost-effective for me.
This is doubly stupid because our $100 label printing machine automatically looks up the Zip code we get from our customers and converts that into a kind of bar code that it prints at the bottom of every label...so a simple hand-scanner would reduce the time it takes them to enter the data considerably...and having their label printing contraption put ALL of the data onto one sticker rather than three (plus a rubber stamp) would also streamline the process immensely.
Amazon has clearly negotiated a way around these crazy rules - but small businesses can't do that. I'm quite sure that much of the $1.46 that Amazon is costing us could be eliminated by simply giving all small businesses the ability to pay online WITHOUT the huge up-charge.
www.sjbaker.org
They plan to make up for it in volume.
Government-owned business operates badly. Who could have expected that?
Anyone who knows much about the Soviet Union, for starters.
There's no time like the present. Well, the past used to be.
This is exactly why the Post Office needs to be privatized. A for-profit business wouldn't be able to survive doing this for Amazon. It would make things fairer for everyone (and probably reduce the cost of a first class postage stamp.)
"Politicians always tell the truth, when they're calling each other liars."
Actually they are, each year they pay an amount equal 1.45% of personals salary to fund a future medical needs. The employee gets that medical care at older age and they don't even have to retire from UPS or FedEx to get it.