Rob Lister wrote:
Hey! Trump made me bump this. Ain't my fault ...
A Citigroup report recently concluded that USPS loses about $1.46 on every Amazon shipment it delivers. Amazon denied that report at the time, stating its "contracts with the USPS are profitable."
I went looking for more information about this Citigroup report and found this:
http://www.washingtonexaminer.com/for-e ... le/2632857
I was just wondering how they arrived at the $1.46 figure. They don't really "show the work" though, like a math teacher would want you to show your work to get credit for the problem.
According to something else I found on the internet, Amazon ships 608 million packages each year, so if the USPS loses $1.46 per package that would add up to about $1 billion in losses per year. The USPS is projected to lose $6 billion overall this year.
Since 2007, the Postal Service has been required to allocate 5.5 percent of its fixed costs to package delivery and to incorporate that into its pricing.
Why? Congress forces USPS to operate at a loss? And what exactly are they anyway? Private? Public? Or something in-between like Fannie Mae and Freddie Mac? Does everyone just assume that in the end, Uncle Sam will pay the bills? Is that a reasonable assumption?
That figure made sense then, but today, 25 percent of the Postal Service's business is package delivery. And thanks to features of the Amazon deal – such as Sunday delivery, grocery delivery, even delivery from fish markets to local restaurants – the expenses have climbed.
In fact, they've climbed so much, according to a recent analysis by Citigroup, that the Postal Service should be charging Amazon $1.46 more per package than the $2 or so it does now. "Amazon now enjoys low rates unavailable to its competitors," the Journal story said. "It's as if Amazon gets a subsidized space on every mail truck."
It's not just the free ride in the truck. It's the $200 million three years ago to furnish carriers with 270,000 Internet-connected handheld scanners needed for real-time package tracking. It's the $5 billion or more to replace the Postal Service's 190,000 delivery vehicles with new ones better equipped to handle packages.
The Postal Service has followed this formula to $60 billion in losses since 2007. It expects to lose about $6 billion more this year. But first-class mail volume is down, junk mail is about the same, packages continue to grow 8 percent or so per year, and Postmaster General Megan Brennan's position is that "we're obviously looking to get additional customers who are interested in that type of customized delivery."
Plus, the USPS has a lot of fucking (fucking=fucking fucking fucking) overhead because of their previous dimwit labor negotiations. So any contract they write should cover that. But it doesn't. So here the fuck we are ED.
What incentive do they really have to drive a hard bargain in labor negotiations? Are postal employees allowed to go on strike? Are they unionized?
A fool thinks himself to be wise, but a wise man knows himself to be a fool.