The Grand Illusion
Last Sunday, we received a package. It wasn’t a special package. It wasn’t sent special delivery or by upgraded UPS or Fedex. It was just a package of items ordered from Amazon – and it was delivered on a Sunday by a U.S. Postal Service carrier in a USPS truck.
I have a problem with this. I don’t get mail on Sunday. The local Post Office has its last collection every day at 3:30 p.m., meaning that anything collected by carriers or posted at the Post Office after 3:30 p.m. doesn’t go out until the next afternoon. Cedar City may not be a large city, but it serves 50,000-60,000 people and is located on a major interstate.
On top of that, as I’ve posted earlier, we get close to a hundred pounds of unordered and unwanted catalogues every month, not to mention the hundred plus charitable solicitations, also from charities to which neither of us has any indication to contribute, or the 20-30 political solicitations for candidates in whom we have no interest.
Yet the Postal Service keeps running deficits and has to keep raising the price of first class and priority mail. A one ounce first class letter costs 55 cents to mail, but non-profit mail rates range from 13cents to 18 cents, while commercial rates are roughly 18 cents. Why exactly should first class and priority mail users pay roughly three times as much for sending things by mail as business marketing mailers, particularly when the U.S. Postal Service is supposed to be operated like a business?
If various businesses can afford to send hundreds of catalogues a year to tens of thousands, if not millions, of people who never buy from them, it strikes me that catalogue mailing rates are far too low, and that a great deal more revenue could be raised by increasing bulk mailing rates, rather than cutting service hours and jacking up first class rates.
And, of course, there’s also the question as to why Amazon gets special service from the U.S. Postal Service… and how much they’re paying for it… although I’d bet, if an outside and impartial audit were conducted, one that compared the costs of providing each class of service and the revenue received from each, that audit would show that Amazon is getting a sweetheart deal.
But, as I also noted earlier, such an audit has never happened and never will, not when the direct mail industry has Congress in its pocket.
This particular issue has been examined a few times. I looked into it the first time I got an Amazon package delivered on a Sunday. Surprise me, needless to say, that USPS was delivering on Sundays. Ultimately it came down to Amazon offered USPS a lot of money to deliver on Sundays for them.
Because they’re not delivering other mail (bulk, advertisements, etc) they may be loosing a small bit of income but they’re not headed out to every address, only places where an Amazon package needs to go to.
The Washington Examiner dug into this and said the USPS looses $1.46 for every Amazon package it delivers due to prices being set nationwide the same and not being re-evaluated every year as inflation occurs. The Examiner stated that Amazon was enjoying a benefit that none of its competitors are enjoying. I find that hard to swallow since any competitor could just hitch their wagon to the USPS the same way Amazon has. In fact the USPS has courted other e-commerce vendors. Amazon is just the largest and most noticeable, not to mention the one that is getting the press for achieving good delivery service.
USPS has stated that Amazon’s injection into the USPS parcel service has made the USPS millions because they provide their parcels pre-sorted and avoid most of the USPS infrastructure. By injecting the Amazon parcels in the last few miles of delivery and not utilizing the rest of the USPS chain it helps to streamline the process a great deal.
Personally I’m all for charging the bulk mailers as much as the rest of us pay. More even, as most of us don’t even look at the bulk mailings. Where my home is located we have a group of mail boxes out on the street. Right beside the grouping is a recycle bin. I think everyone of us gets our mail and instantly drops all the bulk mailers in the recycle bin. A waste of materials, printing, delivery and my mail box’s space.
In the UK over the past 2 years the amount of unsolicited post I get has dropped to almost zero, as has unsolicited email. I suppose this is due mainly to legislation known as GDPR which likely affected charities most.
Amazon delivers on Sundays here as well but not through the Royal Mail but via couriers. Couriers are now effectively the agent of choice for parcels as they pick up from home or pickup points and their prices are reducing via resellers. The Royal Mail however is sticking to a pricing model which seems to be commercially suicidal.
Royal Mail has the monopoly on letters however.
You think you have it bad. In Australia it costs over $1.00 to send a letter, so few do. Therefore, Australia Post has decided the answer is to further increase the cost!!!!
They must be copying the USPS model.
If the amount of bulk mail I get is any indication, if the USPS raised its bulk mail rate by 2 cents then it would have earned an extra 1.12 this week just on circulars. Just wait until the political season really kicks in… the USPS could become solvent in just 3 months of political ads.
Which is why it would never happen. Politicians are very, very cheap with their own money.
I seem to recall reading that when FedEx started advertising about its delivery service, USPS did the same, pointing out it could give the same service for cheaper . . . until it was forbidden to do so. After all, you can’t have a government service actually telling people it’s more efficient than a private one. Why, then, government might actually be good for something!!!
Particularly bitter tonight because I’ve bee reading a bit of the history of Kyrgyzstan. Too bad Ayn Rand died before we could send her there . . . .
Ugh, let’s not pretend that the USPS is allowed to operate as a ‘business’ – its financial problems were caused by the GOP, full stop. This is a hugely important distinction that’s missing in this discussion here. For example:
“[T]here is the Postal Accountability and Enhancement Act of 2006 (PAEA), which some have taken to calling “the most insane law” ever passed by Congress. The law requires the Postal Service, which receives no taxpayer subsidies, to prefund its retirees’ health benefits up to the year 2056. This is a $5 billion per year cost; it is a requirement that no other entity, private or public, has to make” (https://www.bloomberg.com/opinion/articles/2018-04-04/congress-not-amazon-messed-up-the-u-s-postal-service)
Complain about the Amazon deal if you want, but don’t ignore the elephant in the room.
Where is a Mr Hamilton when the health and very existence of an institution enshrined in the very Constitution is discussed?