Re: The Post Office

1

My guess is they hobble the union and do nothing about charging more to large businesses. It's the brand.


Posted by: Moby Hick | Link to this comment | 05- 7-20 6:13 AM
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should the Post Office actually be charging companies like Amazon more? I know Trump just hates Bezos because of the WP. But is Amazon actually getting some kind of special deal? Or is the gripe just that Amazon could be squeezed for more profit, since they are such a wealthy company?)

Amazon is the USPS's biggest single customer by far - 25% of revenue for competitive services.

Competitive services are where someone else takes it most of the way and drops it at a USPS sorting office and the USPS delivers it the last mile or two. The USPS charges the someone else for this, obviously, and it is legally obliged to charge them more than cost, including both marginal cost of delivery and a contribution to fixed costs. Competitive services makes up 3% of USPS volume and 30% of revenue, and has to cover 5.5% of fixed costs. In fact it covers a lot more. That 5.5% of fixed costs is $1.6 bn; in 2017 competitive products contributed $6.8 billion to fixed costs, plus covering marginal costs.

40% of Amazon deliveries in the US are handled like this. The other 60% are delivered all the way by non-USPS delivery services.

We don't know exactly how much it charges Amazon, because it's considered commercially sensitive. Amazon (like any big customer) is almost certainly getting a discount compared to normal competitive service rates. But it is not possible, legally, for USPS to be losing money on its Amazon business, and the PRC confirms that the USPS is making a profit on every parcel it delivers for Amazon.

So: Is Amazon getting a better deal than other competitive-service customers? Almost definitely.
Is Amazon ripping off the USPS? Not really.
Could you charge Amazon more? Maybe. Note that Amazon already uses non-USPS services for most of its deliveries. If USPS put its rates up, presumably it would lose more of Amazon's business.


Posted by: ajay | Link to this comment | 05- 7-20 7:12 AM
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The Post Office subsidies rural America. That's why I think nothing will happen except to weaken the union.


Posted by: Moby Hick | Link to this comment | 05- 7-20 7:15 AM
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2: Do you google like a motherfucker or do you have some really interesting reason for happening to have that information to hand?


Posted by: Mossy Character | Link to this comment | 05- 7-20 7:24 AM
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5

Both is possible


Posted by: Moby Hick | Link to this comment | 05- 7-20 7:27 AM
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4: mostly A, but I've had to look at this before so I knew a little about it.


Posted by: ajay | Link to this comment | 05- 7-20 7:28 AM
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I had heard (from someone fairly senior at USPS) that USPS rate setting is: USPS sends rate proposals to congress. Congressmen listen to lobbyists about what they'd ilke changed, including UPS/FedEx people. Congress then approves or suggests changes to the proposed rates.

I don't even know, this is pretty depressing.


Posted by: lw | Link to this comment | 05- 7-20 7:30 AM
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4: maybe it should be my mission to slip in increasingly difficult questions and see where Ajay taps out.


Posted by: heebie | Link to this comment | 05- 7-20 7:34 AM
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7: I'm sure that happens, but if those figures I found are correct then competitive product is 3% of USPS deliveries and covering something like 22% of USPS fixed costs, so it doesn't look like USPS is in too much trouble. Businesses in general would presumably like competitive product rates to be as low as possible, but FedEx and UPS would presumably like rates to be higher, so that they can take more of Amazon's delivery business away from USPS.


Posted by: ajay | Link to this comment | 05- 7-20 7:42 AM
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And Amazon is creating a contract worker delivery force. The trucks are everywhere.


Posted by: Moby Hick | Link to this comment | 05- 7-20 7:43 AM
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Could you charge Amazon more? Maybe. Note that Amazon already uses non-USPS services for most of its deliveries. If USPS put its rates up, presumably it would lose more of Amazon's business.

Presumably a big competitive advantage (and cost) of the post office is that it has such broad reach (rural delivery, post offices in every town). I'd assume that the non-USPS deliveries that Amazon is doing are mostly in communities that are denser and cheaper to serve.

But, it's still reassuring to know that there's nothing obviously crazy about the arrangement that USPS has with Amazon.


Posted by: NickS | Link to this comment | 05- 7-20 8:13 AM
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12

Andrew Jackson also installed an unqualified crony as Postmaster General (which was a much more important position at the time), although for different reasons.


Posted by: teofilo | Link to this comment | 05- 7-20 11:07 AM
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13

We all know Jackson wanted a letter box he could fuck.


Posted by: Moby Hick | Link to this comment | 05- 7-20 11:11 AM
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14

Probably true of Trump too, to be fair.


Posted by: teofilo | Link to this comment | 05- 7-20 11:13 AM
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Looking forward to receiving regular updates in the mail from our glorious and patriotic leaders on their magnificent success in rejuvenating the nation through an innovative approach to pandemic response, unlike that of many other nations whose timid and hidebound policies can only aim at preserving continuity of life.


Posted by: fake accent | Link to this comment | 05- 7-20 11:15 AM
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I'm surprised the percentage of Amazon deliveries by USPS is so high. My house gets Amazon deliveries by UPS. Office too.

Now that I don't have a secretary, I find myself going to the post office a lot more often. Usually to send service copies of filings in a couple of cases where idiot opposing counsel insist that they get pieces of paper sent to them in the mail, rather than a pdf sent by email. They want paper copies, and apparently the millennials are too scared to tell them about control-p. I rant about this every time I'm at the post office sending eight identical mailings, and the clerks are now familiar with me and my rant.

I've been representing a guy who does rural USPS deliveries under contract. Some day, I'll be able to share the ridiculous drama involved.

Meanwhile, I'm reminded that more than 40 years ago there was a UPS driver servicing a rural route near where I lived who was said to be very popular among the women along the route. A friend of mine fucked him, and told me that the admiration of the guy was well deserved. Apparently, in the 70s, UPS drivers had time enough for extra customer service.


Posted by: CharleyCarp | Link to this comment | 05- 7-20 11:52 AM
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17

Must have something to do with them only being allowed to turn in one direction.


Posted by: SP | Link to this comment | 05- 7-20 11:58 AM
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18

"would you like to see my little red mailbox flag stand up?"


Posted by: heebie | Link to this comment | 05- 7-20 12:04 PM
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19

I guess mailmen don't usually bring mailboxes.


Posted by: | Link to this comment | 05- 7-20 12:04 PM
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20

I don't know anything about the mechanics/legality of a strike here, but I do think that if there was a postal strike, Trump would back the fuck down. His MO is to have a lot of bluster, but cave in the face of actual confrontation.


Posted by: Spike | Link to this comment | 05- 7-20 12:36 PM
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Last fall we stayed at a remote B&B in the far western tip of the panhandle of Oklahoma. The proprietors were in the in early 80s and did a contract USPS route which involved their driving 60+ miles one way over half-paved roads from their town of 50 or so to a slightly larger town in New Mexico with a post office and then delivering to their town and to the several dozen people living in between. When we first got there someone was subbing for them at the B&B and the postal route came with that. No idea if fucking was ever involved.


Posted by: JP Stormcrow | Link to this comment | 05- 7-20 1:25 PM
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I thought aside from the Amazon-USPS rates issue, Amazon has also been avidly figuring out how to get good-enough value using their own exclusive contractors (the now-liveried vans), so at some point they might tell the USPS to sit and spin. And those contractors are apparently designed to keep wages and working standards as low as possible while also avoiding legal responsibility.


Posted by: Minivet | Link to this comment | 05- 7-20 7:37 PM
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Also postal privatization isn't an all-or-nothing deal. I wouldn't put it past the GOP to keep rural and exurban mail service unchanged while fucking over the cities.


Posted by: Minivet | Link to this comment | 05- 7-20 7:38 PM
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22: They drive pretty badly.


Posted by: Moby Hick | Link to this comment | 05- 7-20 7:45 PM
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