President Trump: The NEW one and only politics thread

There are essentially two parts to the USPS. There is the non-competitive, government monopoly (on being able to deliver stamped mail to a mailbox). And there is the somewhat competitive package delivery it moved into in recent times.

As an entire operation, it loses billions of dollars every year -- I discussed this in earlier posts. It is run by a Congress, which is more interested in buying off constituents for votes than it is in fiscal responsibility, so it gave out ridiculous contracts with rich pension promises -- which of course, the USPS can't afford to fund (and doesn't.

On stamped mail, even if it wasn't an inefficient operation with bloated costs, it would lose money (just not as much), because postage rates are set by a political board appointed by Congress, not by an actual market.

On package delivery, it does have competition -- FedEx and UPS, for example. They set the rates competitively. Trump is talking of his ass, as you said, but the USPS does offer discounts to bulk customers, unlike what you said. In a variety of ways. 1) based on volume, which of course Amazon brings, and 2) based on how much work Amazon is willing to do to make it easier for the USPS. For example, presorting, adding barcodes to USPS specs, etc. Those discounts would be available to any entity, though. It's just that nobody has Amazon's volumes.

UPS or FedEx would offer those kinds of volume discounts. It's good business. What you lose in margin, you make up in volume on the customer.

I am sure that it is efficient and cheaper for Amazon to let the USPS deliver the last mile. ... or else Amazon, which is incredibly well run would go to a better option. But if the USPS makes it so that it isn't economic for Amazon, guess what? Amazon is going to just roll out the shipping service it has been working on for quite a while now and do the delivery itself. Amazon benefits from the USPS. But the USPS benefits from Amazon. That is a good business arrangement. Even the Sunday delivery, which the USPS instituted for Amazon, benefits the USPS, because it gave it enough business to be able to spread out the volume over more days, which led to a productivity enhancement that lowered costs.

The bottom line: The USPS loses billions of dollars because it has high labor costs and contracts that created financial obligations it can't possibly meet. It operates too expensively. The one competitive part of the business -- what has made it so that it loses a few billion a year rather than tens of billions -- has been package delivery. Amazon has probably been its best customer. Try to raise prices (to make the USPS uncompetitive in that business) and Amazon will find a better option. And the USPS will lose due to the stupidity more than Amazon does.

 

Clip of the moron just now from a few minutes ago saying, "the post office loses billions of dollars a year because it delivers packages for Amazon." Blah blah blah. They need to paid more.

That is absolute nonsense. The USPS loses billions of dollars a year because its costs are way too high. And in fact, the profits (yes profits) it makes on package deliver are the only thing from keeping it from losing tens of billions of dollars a year rather than $2 to $3 billion. As wiht everything with this guy. ... he just lied / was misinformed / if his lips are moving, it isn't true.

It's just perverse when the best thing the USPS has had going for it has been Amazon. ... and the president is doing this.