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An interesting topic. From the linked article (which I couldn't read in full because its behind a paywall):
Quote:
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.
It might be an "insider secret" to most, but the United States Post Office has always provided discounts for anyone willing to presort their deliverable letters and packages. Back in the early 1990's, the company I worked for sent a lot of mail through the local post office, something like ten million pieces a year. The local USPS, in order to lighten their own processing load, cut the company a per-piece discount of about 15% if we presorted the mail via a Zip Code algorithm that the Post Office itself used.
So it's not that there's some sort of collusion between the USPS and Amazon - it's just that Amazon's sheer size and expertise makes it easier for them to take advantage of these discounts.
As for why Amazon gets the discount and the Ebay seller doesn't - the Ebay seller isn't taking his package all the way to the recipient's post office for 'last mile delivery'.
So when you say the recipients post office do you mean that amazon, through some other method, ships packages to the post office that serves the zip code of the destination, then to PO takes it the rest of the way?
should taxpayers be subsidizing jeff Bezos, soon to be the richest man in the world?
I can't get beyond the WSJ paywall.
I did find this WSJ article from 2002 describing the " postal injection" method of delivery employed by Amazon.
According to this, Amazon or independents employed by Amazon, deliver pre- sorted packages from Amazon warehouses to local postal depots and in doing so eliminate processing steps for the USPS, thus reducing USPS cost.
No one in 2002 could have predicted the transformation of retailing from brick and mortar to online shopping that occured over the past 15 years.
What is unknown is if the value of eliminated processing steps within the USPS balances the discount.
They do save USPS money by doing the sorting themselves, so that's something that should be considered, but I'm sure beyond that they're getting a break because of the sheer volume of business they're giving them.
Without Amazon, who knows where the USPS might be today.
I did find this WSJ article from 2002 describing the " postal injection" method of delivery employed by Amazon.
According to this, Amazon or independents employed by Amazon, deliver pre- sorted packages from Amazon warehouses to local postal depots and in doing so eliminate processing steps for the USPS, thus reducing USPS cost.
No one in 2002 could have predicted the transformation of retailing from brick and mortar to online shopping that occured over the past 15 years.
What is unknown is if the value of eliminated processing steps within the USPS balances the discount.
If that's the case this may actually be a benefit for the USPS, that mailperson and truck are going to those destinations with or without Amazon deliveries.
I'm pretty much done with Amazon now, I don't support mega retailers that gobble up or starve all of their competitors. Haven't shopped at Walmart since around 2002.
I'm pretty much done with Amazon now, I don't support mega retailers that gobble up or starve all of their competitors. Haven't shopped at Walmart since around 2002.
Scary thought. Walmart is small compared to Amazon.
An interesting topic. From the linked article (which I couldn't read in full because its behind a paywall):
It might be an "insider secret" to most, but the United States Post Office has always provided discounts for anyone willing to presort their deliverable letters and packages. Back in the early 1990's, the company I worked for sent a lot of mail through the local post office, something like ten million pieces a year. The local USPS, in order to lighten their own processing load, cut the company a per-piece discount of about 15% if we presorted the mail via a Zip Code algorithm that the Post Office itself used.
So it's not that there's some sort of collusion between the USPS and Amazon - it's just that Amazon's sheer size and expertise makes it easier for them to take advantage of these discounts.
As for why Amazon gets the discount and the Ebay seller doesn't - the Ebay seller isn't taking his package all the way to the recipient's post office for 'last mile delivery'.
When I take packages to the PO for shipping I do so at my local PO and do not presort because I do not ship in volume. These packages are then picked - up by the USPS for downstream processing at a regional center and eventually transported to another center. Others rely on USPC to pick up packages from their doorstep. Both require USPC to execute steps and incur costs that they do not, for large online retailers who presort and deliver directly to the shipping depot, not local PO.
I DK the USPS cost of the processes eliminated by Amazon. Nor do I know what is costs Amazon to execute those processes, themselves. I assume Amazon can do it cheaper because they are not burdened with labor agreements, relatively rich benefits and funding pension plans, as is the USPS.
Amazon could use UPS or another private carrier instead of the USPS. In doing so, it would reduce USPS income and ability to fund their pensions.
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