The US Postal Service – that once necessary, and now bankrupt, albatross that hangs heavy on the necks of US taxpayers, has long drawn the ire of free market advocates. As a government agency, the USPS has continued to exist despite racking up multiple billions of dollars in losses year after year, on an ever-increasing level. Were it a private entity, it would have long ago been relegated to the history books as a failed enterprise.
However, those Necromancers at Amazon.com have revived the zombie corpse of the USPS, giving it new life via Sunday deliveries. News broke yesterday that the USPS had taken a step towards free market thinking, making a deal with Amazon.com to expand its delivery days, solely for that company, in order to boost the USPS’s sagging income.
The cash-short United States Postal Service, which has failed to win congressional approval to stop delivering mail on Saturdays to save money, has struck a deal with the online retailer Amazon.com to deliver the company’s packages on Sundays — a first for both, with obvious advantages for each.
The deal, announced on Sunday and taking effect immediately, in time for the holiday shopping season, gives the Postal Service a chance to take some business from United Parcel Service and FedEx, which do not deliver on Sundays. Now, some orders that would have been handled by either of those carriers for Monday delivery will go through the Postal Service and arrive on Sunday.
The Postal Service said it expected to make more such deals with other merchants, seeking a larger role in the $186 billion e-commerce market. Amazon.com would not say if it would try to arrange Sunday deliveries with other parcel carriers.
For this holiday shopping season, Sunday delivery of Amazon products will be limited to the Los Angeles and New York metropolitan areas, which in New York’s case includes parts of New Jersey and Connecticut. In 2014 it is expected to expand to other cities including Dallas, Houston, New Orleans and Phoenix.
What a novel approach! Instead of continuing to lose money as a rule (and it’s absurd that the idiots in Congress voted against the ceasing of Saturday mail), the USPS has actually made a move to bring in additional revenue to offset losses! This type of thinking never happens in government.
One thing that does bother me about this is that the USPS, due to its subsidized existence as a government entity that is not self-sufficient (drawing on public money as well as income from stamps and shipping fees), can most likely undercut private firms when bidding to provide said service for Amazon. UPS and Fed Ex have real margins and most likely can’t offer the rates that the USPS can – after all the USPS can add public funds to cover any shortcomings. This reminds me of the government farming out prison labor. I don’t know if UPS or Fed Ex were approached by Amazon to bid on the business mind you – I’m just hypothesizing.
Seeing as the USPS is looking to expand this type of offering, we may yet see this zombie fully come back to life, rising on the back of private industry.