USPS – insourcing is killing the contractors that built its network
‘You are not a business, but a cost line on someone else’s P&L’
© Deanpictures
By Alex Lennane
So Amazon is effectively being heavily subsidised – allowing it to buy cheap and sell cheap, while making a fortune. That will come as no surprise. But the amount is more shocking than the fact itself. According to this article, Citigroup analysis shows that Amazon underpays the US Postal Service (USPS) by $1.46 per parcel. That – along with the significant investments the USPS has had to make to ensure it can deliver for Amazon – has led to $60bn in losses since 2007, with a further $6bn loss slated for this year. As this writer concludes, in a fascinating article: “If you’re in a deal where you lose money and your partner profits wildly, maybe deal-making is not for you. When tax dollars are at stake — and they are, regardless of Postal Service protestations — we have an interest in assuring the deals the Postal Service makes, serve it and not the richest, or second-richest, man in the world.” Quite.
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