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Amazon is happy because it has a deal that takes advantage of a loophole in the law that gives it a taxpayer-subsidized deal none of its competitors could get or match.
That's how it is that, according to a recent piece in the Wall Street Journal, "The U.S. Postal Service delivers the company's boxes well below its own costs."
Bezos can sell shipping below cost because he buys it below cost. He buys below cost because of what the Journal piece termed "an unappreciated accident of history."
In fact, they've climbed so much, according to a recent analysis by Citigroup, that the Postal Service should be charging Amazon $1.46 more per package than the $2 or so it does now. "Amazon now enjoys low rates unavailable to its competitors," the Journal story said. "It's as if Amazon gets a subsidized space on every mail truck."
It's not just the free ride in the truck. It's the $200 million three years ago to furnish carriers with 270,000 Internet-connected handheld scanners needed for real-time package tracking. It's the $5 billion or more to replace the Postal Service's 190,000 delivery vehicles with new ones better equipped to handle packages.
originally posted by: matafuchs
The USPS is failing because of pensions and retirement benefits as well as having to many operating locations. They are losing there and then you throw in the fact they lost money on every Amazon delivery and yes, the USPS is failing. They cannot keep up with what they have now to do.
originally posted by: av8r007
a reply to: Bluntone22
In business it can be a GOOD thing to lose a customer. Business is not what most people think it is, if you can't lose one customer without it phasing you, then you don't have a good business model. Secondly not all customers are good customers, some don't deserve your services, nor would you want to give them services. Good companies pick and choose who they work with. Activity != success. Profit = success.