Is Amazon really ripping off the US Postal Service?

January 2, 2018

USPS really does make deals with Amazon. It all starts with how the postal system works: According to Kevin Kosar, vice president of policy for the R Street Institute, a free-market think tank, USPS is basically two separate entities: the monopoly side and the market side.

The monopoly side processes regular, first-class mail — wedding invitations, baby announcements, birthday cards, and bills. There isn’t much competition for sending an ordinary letter.

The market services are parcel services, which competitors like UPS and FedEx also provide — and which means more competition.

An independent agency, the Postal Regulatory Commission, oversees and reviews the rates the US Postal Service sets for both the monopoly and competitive sides, basically reviewing and giving the okay for any changes — including a one cent stamp increase.

But USPS, Kosar explains, also cuts individual deals with companies that mail or ship in bulk — what are called “workshare discounts.”

“The prices that the company pays is going to be haggled and based on how much [the companies] prepare whatever is being shipped before handing it over to the Postal Service,” Kosar said.

That preparation includes making sure goods are packaged in the right size boxes, or parcels are outfitted with a bar code that works with the post office — basically anything that makes the USPS’s job easier and cuts down on some logistical and processing costs.

And a massive company like Amazon, with the infrastructure and resources to do what the Postal Service needs, will probably get a more favorable deal. “Obviously bigger companies are better at doing this, that’s how they eke out nice little margins, but driving those costs down,” Kosar said.

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93 Comments on "Is Amazon really ripping off the US Postal Service?"

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Russ Emele

not as much as UPS

Butch Gerstandt

FedEx ups and usps need to deliver there own parcles

Shana Downer

Then the Post Office needs to fly their own mail around. They have an agreement with FedEx to be the delivering agent of FedEx parcels in return for using their planes to fly our packages. It’s a business relationship. I’m sure there’s a similar agreement with UPS.

Butch Gerstandt

Well we used to make tons of money before all this nextday bullsgit delivery…let fedex and ups loose all the money we did great with 2 to 3 days delevery

Butch Gerstandt

The hell with flying it truck it im sure the truckers will love us for it

Ronald Moore

Everyone is using post service.

Glen Curl

My Amazon orders come UPS.

Jameson Toy

Could never happen with our brilliant management! 😂

Stefanie Mitchum
Most of Amazon is brought directly to us. They have 70 distribution locations. Therefore, they don’t put their parcels into our “processing” systems. So it cuts out our costs to handle, put on 18 wheelers, mail delivery trucks, then to us to deliver. They do get a good rate but they cut out the middle expenses. However, we need to be paid to deliver all of These! Mail count hasn’t been done on my route since these started coming by the load! So yes going up on prices could be good for the ones wanting to get their hands on… Read more »
Nathan VanAken

My zip code does not receive any Amazon direct

Stefanie Mitchum

We used to be like that! We would get some via FedEx etc… until Christmas came around, now we get pallets of them daily.

Elvis Monkey-Buns

So glad I see someone else mention this. We only process them in the office no plants no transportation ext…. we can’t charge the same as a regular package now how our rates are for Amazon compared to ups and fed ex who do the same thing I can’t say. I don’t know what they pay compared to Amazon

Cathy Engle

Mail count will be in February

Misty Black

Cathy Engle our contract with Amazon is up at the middle of February. Go figure

Jacki

Like how they set that one yoo!!!! Not me!!! Screwed again!!

Jacki

Up.. not yoo

Mitzi Groce

Cathy Engle Probably Amazon will take that time off!!

Brad Weidert

Mitzi Groce why would Amazon care about our mail count?

Tom Stephens

Misty Black, we renewed that contract in Sept or Oct

Jordan Mark Sewell

Cutting out the plant work doesn’t warrant a 90% price reduction for large parcels.

Donna Dobbins McCall

Brad Weidert you are kidding ,right?

Michael Mohr

Not the city craft, but Rural, abso-freakin-lutely.

Elaine Corman

No the post office isn’t getting ripped off but the carriers are. We had none of this in mail count and we will have none of them at the next one…..therefore, we delivered everything for 0 compensation since this craziness all started. Question…..where has our union been through all of their carriers getting ripped off?!?!

William Mcintyre

Goto meetings. Get involved. Fix the things that are broken. We’re all depending on you.

April Brown Graham

William Mcintyre I go to meetings. You know what we’re told? There is nothing we can do. We have to abide by the agreement with amazon. Blah blah blah.

William Mcintyre

April Brown Graham so then become a delegate. Become an officer and fix the broken things.

Joe Baszkiewicz

The union is full of lazy people who haven’t carried since before we had scanners!

Jay Schreiber

Dennis Conley is back to carrying his route because the membership voted for a change.

Mary Beth

That’s what we’ve been asking all along!

Sara Stephens

It would be a bit better is amazon actually used the envelopes or a smaller box for the item thats in the big box.

RRR
Elaine: Wow you hit the nail on the head. Where was the the union during the holiday season when amazon killed us and carriers were being run to death and many times doing it for free? I didn’t see one thing put out by the union or one b***h and complaint by the union. I guess they couldn’t see it either. When you are up the butt of management, its dark in there. But I am sure when they finally come out in the day of light, you’ll hear from the union about all their bullshit conferences coming up. Keep… Read more »
Sally Rose Allen

Last count we had Amazon but it still was not as much as it was when it started. Then amazon in our area started delivering their own and it cut down the parcels load for us.

Colleen Daves

Almost as much as mailers using duplicate Ship and click labels

Sara Stephens

If you get 2 at one address, its postage due for one of them….sucks but hey the customer didnt try to cheat.

Henry Dejean

TRUMP with at least five bankruptcies against his own business hotel and casino building should not be an advisor for any deals between Amazon and the US postal service .

Mark Taylor

Five out of how many?

Henry Dejean

FOCUS on Trump foreclosure in new Jersey and owned money to European countries Bank.. and not paying enough taxes to the federal government.
Lol Amazon no problem baby boy and girl

Henry Dejean
Tom Stephens

Henry Dejean, whats your sorce that Trump didn’t pay enough in taxes? Seems suspect to as he gets audited quite frequently.

Jordan Mark Sewell

This fool has all the conjecture you need

Johnny Criss
Have you ever owned a business? Do you know that businesses all over the country file bankruptcy every day? You know why businesses file bankruptcy….not because they can’t manage something, but because it’s allowed by the federal government and it lets a business rewrite all contracts and start from scratch. It’s a sneaky practice, one that congress has ensured never gets changed. People who hate Trump so much, that they can’t even think on their own and do a little research into things 🤦‍♂️🤦‍♂️ you really need to step back and learn to ask questions. I think the USPS should… Read more »
Jo Stevenson

You and I will be in big trouble if they get rid of our unions!

Jennifer Spell

Explain to me how we profit off of 99$ unlimited free shipping Genius.

Jo Stevenson

Amazon’s prime yearly charge to customers has nothing to do with what the post office charges them for shipping their parcels,

Liana Berge

Henry Ford (you know, the guy who made cars affordable for the average American by creating the assembly line) went bankrupt 2 or 3 times before changing the world with his car production – bankruptcy means NOTHING

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