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Trump has repeatedly said without evidence that deliveries for Amazon were costing the service money... How about this article in the Wall Street journal and t

Trump 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 ago
Well, 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 ago
  To 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 ago
    Well, 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."
    - burfog 8y ago
      It isn't so easy to determine if costs are covered. Suppose you have a store that sells rutabagas and phonebooks. You buy at wholesale prices of $1 per rutabaga and $2 per phonebook. You need a markup to cover the cost of rent, bond payments, volcano insurance, and heating oil. You could mark up each product by 50% or by $0.75 or whatever. You can do the same percentage, the same per-item amount of dollars, the same amount of dollars for the total of all items sold, or something else. If you sell rutabagas for $1 each and phonebooks for $5 each, does that count? You didn't exactly take a loss on the rutabagas, but on the other hand they didn't contribute toward paying for that volcano insurance. Maybe selling the rutabagas cheaply will bring in more customers, many of whom will buy overpriced phonebooks. If a rutabaga sold at $0.79 causes an average of 3.14 phonebooks at $8.05 to be sold, does that rutabaga cover costs?
      - perl4ever 8y ago
        "It isn't so easy to determine if costs are covered." I suppose I agree that it's not easy to attribute costs, but if this is a defense of Citibank or Trump's claims about Amazon, it seems like special pleading. If it isn't so easy to determine if costs are covered, and if the Post Office is not giving them any deal other major shippers don't get, and they are audited according to some standards that people defined as acceptable, then it seems as though people should stop claiming the USPS is subsidizing Amazon.
- celias 8y ago
  Here's a piece from NPR's The Indicator that discusses this in more detail https://www.npr.org/templates/transcript/transcript.php?storyId=604099040 https://www.npr.org/templates/transcript/transcript.php?stor... It is based on an article in Business Insider (paywalled) from Josh Barro http://www.businessinsider.com/trump-amazon-twitter-attacks-usps-post-office-citi-note-2018-4 http://www.businessinsider.com/trump-amazon-twitter-attacks-...
  - mmt 8y ago
    Thank you for these. My main takeaway from it is that the (growing) package business is subsidizing the (shrinking) regular-mail business. Also, it's mostly UPS and Fedex doing the most whining. It reminds me of the Far Side cartoon with the dog outside the window urging the sleeping owner "Puuut the caaaat ouuuuut". Incidentally, that second article wasn't paywalled for me.
- deleted 8y ago
  [deleted]
- sir_stier 8y ago
  I am in no way saying it has to come from multiple sources. Evidence...no matter how strong or weak, only needs to be legitimate. The whole article awkwardly stresses twice that the argument is without evidence. Which is simply not true. How about the fact Amazon after deductions has paid ZERO federal taxes? Despite billions of dollars in US sales. I pulled those sources up with a quick Google search since I remember reading about it. For a journalist to say or imply the Wall Street Journal published something, and Citibank published something...without evidence is scandalous and false. Trump is merely parroting the news. Says much more about the integrity of the article more than anything else.

perl4ever 8y ago

Well, 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 ago
To 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 ago
  Well, 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."
  - burfog 8y ago
    It isn't so easy to determine if costs are covered. Suppose you have a store that sells rutabagas and phonebooks. You buy at wholesale prices of $1 per rutabaga and $2 per phonebook. You need a markup to cover the cost of rent, bond payments, volcano insurance, and heating oil. You could mark up each product by 50% or by $0.75 or whatever. You can do the same percentage, the same per-item amount of dollars, the same amount of dollars for the total of all items sold, or something else. If you sell rutabagas for $1 each and phonebooks for $5 each, does that count? You didn't exactly take a loss on the rutabagas, but on the other hand they didn't contribute toward paying for that volcano insurance. Maybe selling the rutabagas cheaply will bring in more customers, many of whom will buy overpriced phonebooks. If a rutabaga sold at $0.79 causes an average of 3.14 phonebooks at $8.05 to be sold, does that rutabaga cover costs?
    - perl4ever 8y ago
      "It isn't so easy to determine if costs are covered." I suppose I agree that it's not easy to attribute costs, but if this is a defense of Citibank or Trump's claims about Amazon, it seems like special pleading. If it isn't so easy to determine if costs are covered, and if the Post Office is not giving them any deal other major shippers don't get, and they are audited according to some standards that people defined as acceptable, then it seems as though people should stop claiming the USPS is subsidizing Amazon.
celias 8y ago
Here's a piece from NPR's The Indicator that discusses this in more detail https://www.npr.org/templates/transcript/transcript.php?storyId=604099040 https://www.npr.org/templates/transcript/transcript.php?stor... It is based on an article in Business Insider (paywalled) from Josh Barro http://www.businessinsider.com/trump-amazon-twitter-attacks-usps-post-office-citi-note-2018-4 http://www.businessinsider.com/trump-amazon-twitter-attacks-...
- mmt 8y ago
  Thank you for these. My main takeaway from it is that the (growing) package business is subsidizing the (shrinking) regular-mail business. Also, it's mostly UPS and Fedex doing the most whining. It reminds me of the Far Side cartoon with the dog outside the window urging the sleeping owner "Puuut the caaaat ouuuuut". Incidentally, that second article wasn't paywalled for me.
deleted 8y ago
[deleted]
sir_stier 8y ago
I am in no way saying it has to come from multiple sources. Evidence...no matter how strong or weak, only needs to be legitimate. The whole article awkwardly stresses twice that the argument is without evidence. Which is simply not true. How about the fact Amazon after deductions has paid ZERO federal taxes? Despite billions of dollars in US sales. I pulled those sources up with a quick Google search since I remember reading about it. For a journalist to say or imply the Wall Street Journal published something, and Citibank published something...without evidence is scandalous and false. Trump is merely parroting the news. Says much more about the integrity of the article more than anything else.