I may have an addiction to shopping on amazon. bigly boxes, at least three of them a week and some of their executive time programming is the bestest! Many people don't know that they make shows, "Catastrophe" is a british gem! I couldn't believe they speak english outside the U.S.
I don't know if the deal they have with the post office is good for the post office or not. If it's a bad deal for the post office though then they need to adjust their pricing, not blame Amazon. Granted I haven't seen the post office claim this is an issue.
There are actually regulations that govern the kinds of contracts the post office is required to make with companies. It states that the contracts have to be profitable for the post office. So if the regulations were followed it isn't possible that Amazon is ripping off the post office.
Bingo, that means every one of Trump's claim about Amazon is false. Trump's other claim that "AMZN doesn't pay taxes" is patently false as well. for decades, until 2 to 3 yrs ago, AMZN, while generating large cash flow, has been not profitable. Thus, it owed no income taxes. Even when it is profitable, it has sufficient business deductions/write-off to offset tax liabilities. Trumps has often boasted that he is smart because his businesses pay no income taxes. insofar as sales tax, AMZN has collected/paid sales taxes, in every state in which sale taxes is required Because of the blatant lies made by Trump, the market cap for AMZN plummeted over $45 Billion. A case can be made, by investors, pension plans et al, that Trump had committed securities fraud. Attention, SEC (Securities and Exhange Commission)
I honestly had no idea that Amazon used the USPS. Maybe I'm naive. I'll reserve judgment until I know the terms of the contract they have -- you'd think this would be available publicly since it's with a government entity. No secret that Amazon is crushing retail stores -- but I chalk that up more to progress of the times than Amazon benefiting from a loophole. I would guess the majority of people now days are becoming more isolated and prefer deliveries to in-store purchases.
The Post Office has an interesting relationship with the government. They take no tax dollars, so are their records publicly available?
The thing that bothers me is that regardless of the deal, the President should not be publicly slamming US companies. Amazon employees well over 500,000 people. They provide a pretty good service. They allow a lot of small businesses to operate by sharing their products via amazon.com.
Amazon switched from exclusively using UPS to also using USPS as adding another vendor ultimately allows them to lower cost and scale faster. (USPS also does Sunday delivery for Amazon) In addition, Amazon has its own last mile delivery service in cities with distribution centers. And Amazon is now starting a dedicated air cargo hub and is sourcing its own aircraft. Eventually Amazon will start doing most of its own shipping and distribution. This is all about adding new shipping options to scale with Amazon's growth. UPS flat out wouldn't be able to keep up with Amazon at its current growth rate. They needed new means of shipping (USPS and Amazon's own services). Lastly, USPS is still an independent entity. USPS lost its direct government subsidies in the 80s. The main indirect subsidy is the fact that by law USPS is the only service that can deliver regular mail. But other than that, USPS isn't really part of the government. Plus the USPS deal with Amazon is largely a consequence of Congress knee capping the USPS with those idiotic pension reforms in 2006. USPS is required to prefund 70 years of pensions over 10 years instead of paying off debt obligations. So as a result, the USPS has had to scramble for alternative revenue (i.e. Amazon delivery).
I don't know if this is true, but someone on the tv yesterday said that Amazon gets the same flat rate deal that all bulk shippers in their tier get. Furthermore, Amazon has laid the groundwork for their own postal service so they can cut out USPS, UPS, etc. all together.
While this was an attempt by congress to torpedo the usps, I think its not really a bad policy. Pensions seemed to be always underfunded. Look at all the state and private pensions shortfalls we see during a downturn.
I agree but funding 75 years of pensions in 10 years was ridiculous. And they gave the USPS no flexibility on the issue. The USPS is essentially defaulting on its debt every year because they are mandated to put everything into pensions. The 2006 bill on pensions was passed when first class mail was at its peak. It's fallen in amount every year since then (excluding election years due to direct mail). They could have introduced a far more flexible method of pre-funding pensions.
No, an actual delivery service not just last mile. https://techcrunch.com/2018/02/09/a...livery-service-to-compete-with-ups-and-fedex/ Will be a slow process of course, but they are trying.
I think it is not simply a question of whether a contract is in the money or out of the money. USPS has a lot of deployed capital to be serviced. A contract that covers its own variable cost but doesn't contribute significantly to servicing the deployed capital can still be a problem. The USPS problem is that they don't have agency to make decisions about their asset base -- they have to serve everyone. So, if there is a problem here, it's not on Amazon's side; it's USPS and their screwed up model. They should be spun off and privatized. The problem Amazon creates that I don't see people talk about, is the amount of cardboard they inject into society. I'm replacing a lot of stuff after Harvey and I have a garage full of cardboard boxes because the city can't pick it up fast enough. What must that do to city garbage pickup programs!
Some good info, thanks gee. Assuming the USPS is negotiating with other companies to deliver on their behalf, I have a hard time seeing how the deal could not be profitable for them? Makes the whole Trump rant seem that much weirder...
I disagree. It has to serve everyone. Historically, USPS has always operated in the red. The idea that the USPS should be profitable is a product of the Nixon administration. Previously operating in the red was the cost of ensuring that rural communities had regular access to mail. To me privatization means giving up on that mandate. And I can tell you that rural post offices mean a lot to local communities. Fedex and UPS have no interest serving small rural communities. Its either USPS or no access to shipping or mail. USPS already tried shutting down rural post offices and scrapping saturday mail. There were a lot of angry people that ultimately convinced enough members of Congress to push back on that. Privatizing USPS is selling out our rural communities. I know many of these communities are Trump voters but they're also Americans who rely heavily on access to the USPS.
