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Trump urged U.S.P.S to double package rates for Amazon: Washington Post
- phoncible 8y agoUgh. I still order things from non-prime sellers, so that would hurt.
- whataretensors 8y agoThen when Amazon creates a new distribution mechanism using AI they'll be surprised. I like the dream of decentralized delivery agents where no central authority can take a cut or intercede. Edit: What the hell, it turns out amazon deliveries are government subsidized to the tune of ~$1.5/each.
- brazzledazzle 8y agoJust Amazon’s or everyone’s? The mandate to deliver to everyone everywhere can’t be cheap. You have to wonder if they ever should have privatized them at all since they’re in a kind of limbo.
- jjeaff 8y agoDefinitely not everyone. But maybe all the really big shippers. Amazon ships for substantially less money than you can get over the counter at USPS.
- Cerium 8y agoIf you print the labels yourself you can access a substantial discount. USPS is very open about the costs of retail shipping. You can get a discount on their website, or access larger discounts through third party websites.
- jjeaff 8y agoThose discounts aren't even close to what large customers like Amazon are getting. They are likely getting around 50 cents a pound (based on FBA inbound averages that they charge sellers) from UPS and FEDEX, which means in cases where they are shipping via USPS, they are getting an even lower rate. Try printing your own label and ship a 2 lbs package an hour away for $1.
- prolikewhoa 8y ago>You have to wonder if they ever should have privatized them at all since they’re in a kind of limbo. There are already private options, USPS just isn't correctly funded and government keeps trying to gut it. The requirement to pre-fund pensions and retiree healthcare so far in the future doesn't allow them to invest money into new research and development.
- sir_stier 8y agoTrump has repeatedly said without evidence that deliveries for Amazon were costing the service money... How about this article in the Wall Street journal and the analysis done by Citibank? https://www.wsj.com/articles/why-the-post-office-gives-amazon-special-delivery-1522603826?mod=trending_now_1&tesla=y https://www.wsj.com/articles/why-the-post-office-gives-amazo... The Washington Examiner? https://www.washingtonexaminer.com/for-every-amazon-package-it-delivers-the-postal-service-loses-146 https://www.washingtonexaminer.com/for-every-amazon-package-...
- perl4ever 8y agoWell, first of all you seem to be presenting this as coming from multiple sources which would make it more authoritative. However, the only source is Citibank, correct? Without looking into it further, I tend to be immediately skeptical because (a) the figure of $1.46 sounds inappropriately precise and (b) the Post Office has publicly stated that they are required by law to cover their costs, and are audited to that end.
- jjeaff 8y agoTo me, the innapropriately precise number doesn't mean anything except that when you are working with estimates, you should not round your final answer any more than necessary. If I estimate cost A is $1 and cost B is $2, I'm going to say that my estimated average cost is $1.50, not $2 As far as required profitability, as any non gaap accounting numbers can attest, you can make anything look profitable if you meddle with the numbers long enough.
- perl4ever 8y agoWell, inappropriate precision just highlights the question of what the uncertainty is. If it's plus or minus $5, that's different than if it's plus or minus $0.50. That's assuming the analysis is otherwise valid. Secondly, I don't see how "non gaap accounting" is relevant when the claim is that they are audited by an independent entity using standards which are not under their control. Here is the link to the statement from the Post Office: http://about.usps.com/news/statements/080117.htm http://about.usps.com/news/statements/080117.htm "By law our competitive package products, including those that we deliver for Amazon, must cover their costs. Our regulator, the Postal Regulatory Commission (PRC), looks carefully at this question every year and has determined that they do."
- cprayingmantis 8y agoI hope they do, the Amazon packages I get through USPS are often late. It’ll force Amazon to go with the quicker alternatives.
- toomuchtodo 8y agoIf Amazon retail is barely profitable when using traditional delivery networks, and their own Flex offering is a dumpster fire due to abusing independent contractors, they’re going to have to burn way more cash to compete at the last mile. This is not a bad thing.
- myrandomcomment 8y agoWe live in this Utopia where we can click buy and in 1-2 days we get what we ordered. Yet no one is ever happy. I think we protest a bit much here.
- prolikewhoa 8y agoCONSUME!!
- trophycase 8y agoIt's almost as if never needing to leave your house and getting things at the touch of a button isn't what makes people happy...
- Fjolsvith 8y agoSo Amazon will just pass the cost on to the customer, like any business would.
- thiagocsf 8y agoI don’t see an issue with that. I don’t want to pay for other people’s packages.
- prolikewhoa 8y agoIt already is passed on to the customer, in your taxes.
- cimmanom 8y agoBut also to the non-customer. I'm boycotting Amazon for a reason, but also apparently being forced to subsidize their shipping. Not cool.
- kumarvvr 8y agoThe invisible hand is now the wizened old hand of a cantankerous idiot.
- prolikewhoa 8y agoIt's not the invisible hand when the USPS loses $1.50 per shipment at the benefit of Amazon while USPS -- a federal service to all Americans -- struggles to stay afloat.
- 6a 8y agoThat's how bulk shipping works. If you are a bulk mailer like, a cc company for example, then you would presort your mail to 5/9/11 digit and you get presorted discount from USPS even for first class mail. So a postage stamp that costs you .50, costs a big mailer, may be, .40 depending on the sorting level and amount of mail.
- kumarvvr 8y agoSo where are the market forces that make USPS become more efficient and allow it to be competent? Isn't it fundamental proposition of the Republican party - "Small government" I am genuinely curious, who put a gun to USPS head and asked it to lose money on every package delivered? They could have increased their prices. But that would mean losing business from Amazon, which, in a "small government" system go to more efficient and competitive players.
- Bluestrike2 8y agoThe USPS doesn't lose $1.50 per Amazon parcel. Legally, they can't price at a loss. Under the Postal Accountability and Enhancement Act of 2006 they have to charge rates that cover their costs.[0] The number you're referring to comes from an analysis that suggested USPS charges $1.46 below market rates. That's not the same as saying it's a "loss" (as most people understand it--i..e, it costs you more than you make) or even a subsidy. The USPS and the independent Postal Regulatory Commission. The USPS profits from these parcels. It's a smaller profit, yes, but that's because the deal involves trading a greater profit for guaranteed, predictable number of future parcels they'd otherwise likely not get. Such deals are common in the shipping industry. Far from making it harder for the USPS to stay afloat, their deal with Amazon and e-commerce shipping in general are the main reasons why they've been able to survive the decline in bulk mail and the onerous regulations (retirement prefunding requirements, etc.) that have drastically impaired the USPS. 0. http://about.usps.com/news/statements/080117.htm http://about.usps.com/news/statements/080117.htm
- prolikewhoa 8y agoWill someone please think of these poor & suffering record profit breaking Fortune 100 companies?
- perl4ever 8y agoI don't think it's sufficient to say "who cares about X" where X is what the President is attacking at the moment, because the consequences may be unforeseen, and go beyond the specific target. His goals are also unclear, which sows instability and uncertainty. In this case, people reasonably suspect that part of the motivation is his dislike for the WaPo and Bezos, and that he wants to attack Amazon due to its association. However, part of the process seems to be spreading non-factual information about the USPS. It's got to be nerve-wracking for the employees, thinking that this might be an indicator that the federal government is working on new ways to undermine them while pretending to "help". Then too, Bezos is not the only owner of a newspaper which has or might criticize the President, so people are justifiably concerned about the implications of this vendetta for a free press. All this is separate from whether the welfare of Amazon is particularly vital to a person.
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- sir_stier 8y agoThe article makes clear that the analysis and exact numbers of loss are difficult to calculate. So there is in most cases an estimation. The author stated twice as fact, that there is no evidence for the USPS loosing money. Trump is pulling it out of his ... without evidence. And that it blatantly false. A simple google search pulled up that analysis by Citibank and multiple mainstream news articles. Including the WSJ. I appreciate you providing the article. More solid that the interpretation of news. On page 4 it says they are losing money and basically subsidizing the shipping or parcels? "We contend that this floor for competitive (parcel) products has been maintained at artificially low levels, creating large-scale systemic economic inefficiencies engendered by what is effectively a government-enforced taxpayer subsidization of the USPS’ irrational pricing." Again, even if the whole argument is weak, it was published with multiple news sources, and comes up with a Citibank study with even a quick Google search....this whole article is absolute hog wash man. Dishonest. Unless anyone wishes to completely invalidate the Citibank study and WSJ article. I've seen no opposing evidence.
- patrickg_zill 8y agoThe fundamental annoyance I have is not only Amazon's (apparently) preferential pricing, but the e-Packet from China pricing. As a consumer I can see the advantage to me, but it seems wildly unfair to Mouser / Digikey and the 1000s of much smaller businesses in the USA to have to pay more to ship a small parcel from Denver CO to somewhere in CA, than an e-Packet from HongKong to e.g. Plattsburgh, NY. It has to be hurting the ability to compete of lots of US based businesses...
- sytelus 8y agoExactly. I don't have the stats on packages getting shipped from China to US on dirt cheap forced upon prices but it is quite likely that they match Amazon. This is mainly because most things ship from China first and then to US domestic market.
- rgbrenner 8y agoIMO, as someone who runs a small business reliant on USPS, it's even worse than that. Other countries like the EU and Canada like to charge an inspection fee for small packages (+ VAT)... it's usually a flat ~$15 (even if the package is worth $5). What do they do during the inspection? Calculate the VAT charge of $0.50. They don't even open the envelope. VAT itself is bad enough... The US doesn't have VAT, and the WTO says it's illegal to put a tariff on imports to fund the US government.. but VAT, the WTO is ok with... which is an across the board tariff on every good shipping into the EU/Canada/etc. Then to tack on the "inspection fee" on top... So not only is there a difference in shipping cost, but when it arrives at the border, their country makes it even more expensive for the customer... discouraging them from ordering from the US in the future.
- mrighele 8y ago> So not only is there a difference in shipping cost, but > when it arrives at the border, their country makes it even > more expensive for the customer... discouraging them from > ordering from the US in the future. Note that a customer living (let's say) in Europe is supposed to pay VAT on everything regardless of the origin, so it's not like the US company is treated differently. In fact until recently it was the other way for online services (AWS for example) because some of them were not adding VAT, giving them an advantage to their European counterparts. (Edit: this of course applies to final customers, for business customers it is a completely different matter).
- yogeshkhetani 8y agoCan Trump have command over what USPS does with their business tactics?
- JudasGoat 8y agoIt might not have the effect President Trump anticipated. In my area (south eastern MA) Amazon has switched to it's own delivery system for the "last mile" at least. This will only accelerate this direction until the "Drones" takeover.