Amazon Deal Probably Won’t Stop USPS Fiscal Bleeding

Amazon.com will deliver its products via the mail on Sunday, something that neither United Parcel Service nor Fedex does.  And the online marketing giant will be using postal vehicles and part-time workers to boot.

This service began in mid-November, just in time for the holiday season http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1874602&highlight=.

The online marketing giant will start this service in New York and Los Angeles and plans to expand next year,  depending on how things go.

This is a brilliant business move on Amazon’s part certainly.  And it’s certain to enrage the two package shipping giants, which at least so far apparently have not made any retaliatory or similar moves. Let’s remember the USPS makes money on its package delivery services.

But it’s not likely this Amazon deal will improve USPS finances at all. In fiscal 2013 ended Sept. 30, the postal service lost $5 billion http://about.usps.com/news/national-releases/2013/pr13_087.htm.

As always, every quarter, the USPS brags about how much it has improved “productivity.” This is usually is a code word for cutting jobs.

And postal reform proposals remain stalled in Congress as they have been for a few years.

Right now, at least one major labor union, the National Association of Letter Carriers is on board with Amazon’s move. The organization says, in essence, that this move affirms the importance of the USPS to American society especially with so much of the world having moved online http://nalc.org/news/latest/11102013_sundays.html.

One advantage Amazon had in pulling off this deal was that it didn’t have to ask Congress for permission.

Over the past few years, Amazon has shown itself to be quite predatory, first with selling books online and cutting into the profits of smaller bookstores. Next it expanded on line to a whole host of other products. Most recently it bought the Washington Post, an action that’s not clearly understood right now.

Company founder/CEO Jeff Bezos is well-known for being ruthless in his business practices and fearless about expanding its markets, as USA Today and others have pointed out http://www.usatoday.com/story/tech/2013/11/04/amazon-book-brad-stone-missionary-tech-firms/3433697/.

Who knows what else Bezos might have in mind for the postal service?

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This entry was posted in American Postal, Congress, postal finances, U.S. Postal Service. Bookmark the permalink.

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