August 1, 2017
But according to a report published by Josh Sandbulte in the Wall Street Journal, USPS has been picking up the tab for Amazon. The WSJ contributor, whose expertise is in the shipping industry, detailed how Congress prevents USPS, through the Postal Accountability and Enhancement Act, from changing the parcel price. This law is designed to avoid “unfair competition” with FedEx and UPS. Section 3626 of Title 39 United States Code has become one of the provisions often quoted whenever limits imposed on USPS are being researched.
The report implies that Amazon gets the better end of the deal through the $1.46 subsidy. It is as if the Postal Accountability and Enhancement Act served as a loophole for Amazon to exploit.
“The U.S. Postal Service delivers the company’s boxes well below its own costs,” Sandbulte mentioned. “Like an accelerant to the fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.” He further labeled that $1.46 subsidy as “a gift card from Uncle Sam.”
USPS has been shifting to package delivery as first-class mail delivery has decreased by 40% from its peak.
With USPS picking up part of the tab for Amazon, it means that the retailing behemoth can drop its prices. FedEx and UPS receive no such deal from shipping, having to bear their share of the system costs to deliver packages.
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