Amazon vs. the Post Office

Is Amazon scamming the American people by driving the United States Postal Service bankrupt?

Not really, according to a Treasury Department task force created by President Trump earlier this year to examine if the post office is being ripped off.

To the contrary, though the country’s mail system is hemorrhaging money, it’s not because of their packing rates, the study concluded.  In fact, the post office is making money off Amazon.  That, and other companies that mail commercial packages, is their profit center.

The financial losses are a reflection of Americans’ transition from mailing letters to email.  We pay bills online instead of popping them in the mailbox.  It saves us the aggravation of stamps and finding a mailbox to drop the letters in, but it’s destroying the business model of a very old institution.

“The reason the postal service is losing money is simple: they do not have a very good ability at pricing their service in order to cover their cost,” says globally recognized expert of supply chain management Brittain Ladd. It would seem they are not good at math, charging Amazon, and everyone, less than it costs to provide the service. Ladd tells KTRH News that if the post office sold sponsorship, simple naming rights, to allow companies access to mailboxes, it could be a very profitable game-changer.  “If someone like Amazon bought the naming rights, Amazon could then put packages they deliver into the mailbox, but they could also open it up to other delivery companies to put packages in your mailbox as well.”

There is talk of USPS raising their rates for packages, requesting a rate hike of five to eleven percent of the Governors of the Post Office.  Credit Suisse estimates that would cost Amazon about a billion dollars a year.

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