Amazon Agreement With Usps

In fact, shipping and parcels were the only growth segment for the post office and jumped more than 50% to $8.3 billion in revenue in the third quarter, which ended June 30, after fiscal 2020 results released on August 7. One in two service categories declined in both revenue and volume, partly due to the coronavirus pandemic. The pandemic increased costs, particularly for personal protective equipment and paid sick leave, contributing to a net loss of $2.2 billion over the period, roughly the same as the previous year. Trump – who is facing accusations from Democrats that funding and operational changes to the mail are supposed to prevent mail-in votes for Democratic challenger Joe Biden from being counted – said in an interview with Fox News on Monday that Amazon was “perhaps the biggest problem with the post office” because of the service`s losses in parcel deliveries. Currently, the way the Post Office calculates its parcel delivery costs starts with the additional costs directly attributable to the delivery of parcels or one of its “competitive” business lines, and then adds a “reasonable” surcharge to cover common or institutional costs. Trump claimed in the interview, without proof, that the postal service was losing about $3 per parcel with Amazon. He had previously claimed that the loss was 1.50 $US. The terms of the postal service delivery contract with Amazon are confidential, but USPS has repeatedly stated that it will not lose money for the deal. In addition, the post office must cover its costs as part of its commercial parcel delivery activity under the law. Amazon regularly uses the postal service to complete the so-called “last mile” of delivery. 4.

Contract with Amazon to operate the USPS for 10 years, with the possibility for Amazon to acquire the postal service. A structured tendering process should be put in place after 10 years to allow Amazon and other companies to formally launch a takeover bid on USPS. (Several U.S. government-funded studies of the postal service have recommended privatizing the USPS.) If the goal is to privatize the U.S. Postal Service then the USPS must be purchased by someone. I`m voting for Amazon to buy it. Despite shipping with UPS and FedEx, most amazon shipments are still shipped via USPS. Amazon is not the only usps customer, but with 40% of Amazon`s business, sandbulte says the postal service “chooses winners and losers in the retail world.” “This is particularly true in pretty much the order of Amazon`s relationship with USPS,” Farhi said. “Amazon is a big part of USPS revenue that if USPS lost it, it would significantly reduce its revenues without substantially reducing their fixed costs.” 5.

Sell mailbox naming rights to Amazon and give Amazon the right to define, design, delete, install, manage, use and manage mailboxes. To send parcels to a mailbox, you can set a fee for UPS, FedEx and other shippers. (This is important because Amazon can use its lockers to modernize postal service and provide consumers with a much better customer experience.) To solve his problems, I think Amazon should proactively turn to Trump to find a solution to make the USPS more efficient and eliminate the significant revenue losses from the mail. The USPS has lost $69 billion since 2007 and will continue to lose money if there are no major reforms.