Why the Post Office Gives Amazon Special Delivery

A Citigroup analysis finds each box gets a $1.46 subsidy. It’s like a gift card from Uncle Sam.

July 13, 2017

Like many close observers of the shipping business, I know a secret about the federal government’s relationship with Amazon: The U.S. Postal Service delivers the company’s boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.

In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.

Amazon is big enough to take full advantage of “postal injection,” and that has tipped the scales in the internet giant’s favor. Select high-volume shippers are able to drop off presorted packages at the local Postal Service depot for “last mile” delivery at cut-rate prices. With high volumes and warehouses near the local depots, Amazon enjoys low rates unavailable to its competitors. My analysis of available data suggests that around two-thirds of Amazon’s domestic deliveries are made by the Postal Service. It’s as if Amazon gets a subsidized space on every mail truck.

Join the Conversation

82 Comments on "Why the Post Office Gives Amazon Special Delivery"

Notify of
Sort by:   newest | oldest | most voted
Doug Horton

All those parcels are upside down… 🔃

Chastity Hollon

Showing the sad face on the other side….

Nancy Uhde

frowny faces –as they should be 🙂

Aaron LaFollette

This would be the worst time in history to say anything about Amazon… (Prime Day)

Beverly McPherson

Subsidized by the carriers who are delivering them for free and the subs who are forced to work Sundays with no overtime….

Cindy Foxx

Yes…so no wonder they can offer it cheaper to them. They’re not actually even paying us to do it!

Carol Hancock Prillaman

This is why they are coming down so hard on rural routes. We are still being paid for evaluated routes that were not counted when Amazon got so big. Later starting times,Sunday delivery by rcas and why are you going over your evaluation? Total BS!

Kelly Nolan Bender

So tired of Amazon. I’ve been an rca for 13 years and now am mandated to work sundays.

Cynthia Migl

And why does our union allow us to deliver them for free?!?!

Robert

You’re working off the clock? If not, youre getting paid.

Eddie

They were paid off they wont even entertain a grievence about packages Which goes to prove they sold us down the river

Glenna Jean Henry

Not even making enough money to pay all expenses incurred…gas, wages, etc. All about a few cents and not the employees.

Kim M Henry

Glenna Jean Henry Yeah between maintenance on your own vehicles and gas.. what you make per hour.. kinda sucks.. compared when you factor it all in.. All the wear and tear daddy put on the vehicles he drove just subbing.. I hate to think of a full time carrier.

Emma Swanigan

It really sucks that we don’t get paid for holidays or Sunday, the union is a joke

Lee Waller

God I hate Amazon!!!! We had 38 pallets of Amazon packages this morning!!! Something’s got to give!!!!

Karen B Hart

Whoa!! That’s crazy!!

April Keller Attardo

Omg that’s for how many routes?

Shannon Cole

If I see another brown box immma puke

Marc Carlson

Your back

Lee Waller

Marc Carlson unfortunately my back already gave out 2 years ago and I had to have back surgery.

Lee Waller

April Keller Attardo 69 rural and 14 city.

Cynthia Migl

Where’s our union on this issue????

Joann Philo Handley

At conventions playing games and drinking if you go by the pictures they post in the union magazines.

Jen

Omg! Which post office do you work at?!

Rick Cooper

10 figures that why

Kelley Roberts

I delivered 190 pkg on my rte today. 😵

Tee Smith

Got you beat! K route- 239 scans today 😭 525 curbside delivery. 116 in my truck 😭 Christmas in July SuCKS

Pj Jackson

Wow that makes my 126 scans look easy. Lol wow.

Tina Marie Greiner
Samantha Koplin

It sucks though when your last count you had 40 to 50 scans a day, and now it’s nothing to double or triple that.

April Brown Graham

I had 205. This is crazy. I have 789 stops and 21 miles.

Ruthi Wolter

as if I didn’t already have a reason to hate Amazon…. wish I could retire

April Keller Attardo

Amazon never even came today until 12:30 soooo I’m going in tomorrow at 6 am to deliver today’s amazon and then I have to deliver tomorrow’s amazon… FML ☹️😤😩

Will Bromund

That’s why here in FL, we can’t start till 8:8:30am no matter how big your rout is, late trucks! But still make your leave and return time?

Emma Swanigan

We can’t start until 8 also, and at one of the office I work at didn’t get there Amazon until after 12 today

Joanne Spicketts-Cooper

And my only thought is; are you freaking kidding me? We became an Amazon office after count so my on average “2” (NOT) parcels per day don’t add up to much so says my postmaster. I seriously call bullshit

Shannon Cole

Ummmmm because they don’t pay their employees to deliver it ?

Lisa Ann Cogan

They do in some areas. I’ve seen them out delivering the past few days and normally I don’t run into them at all. The guy yesterday took 5 minutes looking for a pkg right down from one of my CBU stops. 😏

Erin J Frickelton Robinson

If the box doesn’t fit in the mailbox we don’t get paid to take it to the door. 😦😡

wpDiscuz

Send this to a friend