Trump is wrong about Amazon on all counts

[SamSpade]

I'm still waiting for anyone to prove Amazon is bad for the economy and the USPS contract with Amazon is private, so no one knows what the deal is but chances are, Amazon is in-large, keeping USPS above water.

With other companies out there with similar business practices as Amazon, ask yourself why Trump hasn't mentioned them specifically.

In your last sentence - you're right, mostly. The problem with the USPS is that the Postal Regulatory Commission's rates for parcels is way behind the times.
When they were last set, it was forecast that parcels would not exceed 5.5% of their business (it's around 25% due to the huge drop-off in first class mail).
So, they DO charge too little for parcels - from EVERYONE - but this is their fault. They've been losing money for a long time. They're just too deep in the
past way of thinking. (per Citigroup's analysis last year, which I can't get a link for).

The Postal Service has one advantage over all other delivery services - they're the only folks who can legally put stuff in the mailbox.

The articles that say, wow, USPS is now delivering billions of packages - Amazon is *helping* them! - are baloney. If you do lose money on parcels,
it is costing them. But it's EVERYONE in that Competitive Products category. Amazon is just a big player.

What DOES make Amazon stand out is - along with the fact that they DO rely on the Postal Service for some of their deliveries - to my knowledge,
they're the ONLY one among the competition that gets delivery on SUNDAY from the Postal Service. That does kind of single them out.

It may well be that the Postal Service will get smart and realize they need to get with the game and up their postal rates. They cannot operate
thinking they mostly deliver first class mail and fourth class advertising.

 

[Starman]

I'm still waiting for anyone to prove Amazon is bad for the economy and the USPS contract with Amazon is private, so no one knows what the deal is but chances are, Amazon is in-large, keeping USPS above water.

With other companies out there with similar business practices as Amazon, ask yourself why Trump hasn't mentioned them specifically.

Because other companies out there don't have owners who purchased the WaPo.

That's all that has the Trumpets upset: daddy told them to be upset. Lord knows, they don't have any original thought process of their own, and they'd never have come up with this unless their handlers told them to.

 

[GURPS]

That's all that has the Trumpets upset: daddy told them to be upset. Lord knows, they don't have any original thought process of their own, and they'd never have come up with this unless their handlers told them to.

yeah ok sure ....

 

[awpitt]

Is Trump’s attack on Bezos and Amazon personal, or is it bad for the economy and USPS?

If Trump didn't have it in for Bezos and the WaPo, we wouldn't even be talking about this.

 

[Kyle]

If Bezos WaPo didn't have it in for Trump, we wouldn't even be talking about this.

 

[awpitt]

I'm still waiting for anyone to prove Amazon is bad for the economy and the USPS contract with Amazon is private, so no one knows what the deal is but chances are, Amazon is in-large, keeping USPS above water.

With other companies out there with similar business practices as Amazon, ask yourself why Trump hasn't mentioned them specifically.

Well, you're going to be waiting for a long time because Trump's accusations are baseless.

 

[awpitt]

So if you feel that is true, than Trump would be going after Bezos and the WaPo. Amazon has nothing to do with it.

 

[Kyle]

So if you feel that is true, than Trump would be going after Bezos and the WaPo. Amazon has nothing to do with it.

I can't speak for him but, just as everyone left sees all Trump touches or owns as an extension of Trump, how are Bezos holdings different?

 

[Chris0nllyn]

In your last sentence - you're right, mostly. The problem with the USPS is that the Postal Regulatory Commission's rates for parcels is way behind the times.
When they were last set, it was forecast that parcels would not exceed 5.5% of their business (it's around 25% due to the huge drop-off in first class mail).
So, they DO charge too little for parcels - from EVERYONE - but this is their fault. They've been losing money for a long time. They're just too deep in the
past way of thinking. (per Citigroup's analysis last year, which I can't get a link for).

The Postal Service has one advantage over all other delivery services - they're the only folks who can legally put stuff in the mailbox.

The articles that say, wow, USPS is now delivering billions of packages - Amazon is *helping* them! - are baloney. If you do lose money on parcels,
it is costing them. But it's EVERYONE in that Competitive Products category. Amazon is just a big player.

What DOES make Amazon stand out is - along with the fact that they DO rely on the Postal Service for some of their deliveries - to my knowledge,
they're the ONLY one among the competition that gets delivery on SUNDAY from the Postal Service. That does kind of single them out.

It may well be that the Postal Service will get smart and realize they need to get with the game and up their postal rates. They cannot operate
thinking they mostly deliver first class mail and fourth class advertising.

If the problem is the parcel rate, that's certainly not the fault of Amazon, as you stated. Hell , even Amazon testified in Congress about USPS giving cheap bulk shipping deals to Chinese companies (which means the rates to ship from China are cheaper than Amazon's)
https://oversight.house.gov/wp-cont...Misener-HOGR-Testimony-Pkg-061615-REVISED.pdf

Now, besides the point that USPS can't seem to be run efficiently, or in the green, Amazon is working on their own delivery service. If USPS says, "Hey Amazon (and everyone else), we're raising our rates", what's stopping Amazon from fast tracking their own delivery service? Once that's up and running, USPS won't be needed and Amazon won't need them (much) anymore and arguably the main company keepign USPS afloat is gone.

We agree that there is systemic managment and other issues regarding the USPS.

 

[awpitt]

...

U.S. President Donald Trump lobbed another Twitter bomb at Amazon.com Inc. on Thursday, criticizing the world’s biggest online retailer for, in his view, failing to pay enough state and local sales tax revenue, hurting the retail job market and abusing postal rates. But the president’s criticisms omit some important facts.

https://www.bloomberg.com/news/arti...n-attack-fact-checking-the-white-house-claims

http://thehill.com/homenews/media/3...ks-trumps-amazon-claims-none-of-that-was-true

 

[Chris0nllyn]

But the president’s criticisms omit some important facts.

Shocker.

 

[GURPS]

Now, besides the point that USPS can't seem to be run efficiently, or in the green, Amazon is working on their own delivery service. If USPS says, "Hey Amazon (and everyone else), we're raising our rates", what's stopping Amazon from fast tracking their own delivery service? Once that's up and running, USPS won't be needed and Amazon won't need them (much) anymore and arguably the main company keepign USPS afloat is gone.

We agree that there is systemic managment and other issues regarding the USPS.

when has the USPS EVER run profitably

 

[GURPS]

"And a reference to that $1.47 the president came up with there? A Citigroup study last year showed on average that the Postal Service was charging a $1.46 below market rates for package delivery, but our researchers point out if that discount exists, it's not just for Amazon, it's a bulk-rate discount," he continued.

So Citigroup was incorrect :shrug: Amazon is not getting a $ 1.46 below market rate

lets parse this ... but our researchers point out if that discount exists, it's not just for Amazon, it's a bulk-rate discount," he continued.

so did Trump say ONLY Amazon gets the discount or Amazon is getting a discount that is below market or cost

I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!

I'll add this ..... if the CitiGroup Report was flawed, and the challenges to the report are not widely circulated
how is it Trumps fault for tweeting out the facts from the CitiGroup Report

http://www.govexec.com/management/2...wrong-about-postal-service-and-amazon/147136/

It is safe to assume that because Amazon is such a large postal customer, it has more leverage and therefore pays particularly beneficial rates. Amazon also maintains its own sort centers around the country, allowing the company to bypass the normal USPS collection and processing procedures by placing its packages in close proximity to their final destinations.

The Postal Service must have all of its negotiated service agreements approved by its oversight body, the Postal Regulatory Commission, before they take effect. PRC ensures that in all agreements, the revenue generated will turn at least some profit compared to the associated costs USPS will incur. The regulators then review every agreement annually and before they are renewed to ensure ongoing compliance. PRC just released its annual compliance review for fiscal 2017 in March. The audit does not identify companies by name, but it found just four of its 846 agreements were out of compliance. USPS has already terminated three of them, and the fourth appeared to have no connection to Amazon.

“The commission’s role as it relates to the review of competitive Negotiated Service Agreements is to ensure that the revenue for each competitive product, including each NSA, exceeds its attributable costs,” said Gail Adams, a PRC spokeswoman. “The overwhelming majority of NSAs with the Postal Service have both covered their attributable costs and complied with the statutory requirements.”

USPS’ “competitive products” refer to its offerings in which private sector companies compete against it, as opposed to products such as regular mail, in which the agency enjoys a government-protected monopoly. PRC determined in 2006 that in addition to exceeding direct costs, revenue from competitive products must collectively also pay for at least 5.5 percent of the Postal Service’s institutional costs like rent or general administration.

The Citigroup analysis neglected, however, to say that the 5.5 percent figure was the floor, not the actual rate, for competitive projects’ contribution. PRC’s fiscal 2017 compliance report found competitive products were required to contribute at least $1.6 billion toward fixed costs, but they exceeded that total by $5 billion. Those products ended up paying for 23 percent of institutional costs last year.

CNN Admitted this months ago


Trump, Amazon and the Postal Service: The story behind the tweet

In short: Trump is likely right that the Postal Service charges less than it really costs to deliver packages, and Amazon is one of its biggest customers. But that's not the root of the agency's fiscal problems.

First of all, the U.S. Postal Service is unlike any other business. It has a government sanctioned monopoly over first-class mail, which it is obligated to send to every corner of the United States for the cost of a stamp.

At the same time, it competes with FedEx and UPS to deliver parcels — but its rates are approved by a board appointed by the president, and almost every aspect of its operations are governed by Congress.

With email replacing snail mail, that first-class mail business has declined dramatically — it's down by 40% since peaking in 2000. Meanwhile, the parcel delivery business has exploded. But the Postal Service hasn't been able to compensate for collapsing mail volumes due to a 2006 law that capped price increases at the rate of inflation and also limited the proportion of its budget that could be devoted to its parcel business.

https://www.washingtonpost.com/busi...24fb7e-3763-11e8-af3c-2123715f78df_story.html
2. Does the Postal Service lose money on Amazon deliveries?

The Postal Service says it makes money on the Amazon deal, and it’s legally prohibited from charging shippers less than its delivery costs. E-commerce revenue provides “essential support to pay for the network and infrastructure that enables us to fulfill our universal service obligation,” David Partenheimer, a spokesman for the Postal Service, wrote in a January op-ed. “All users of the mail benefit.”

4. Isn’t the post office losing money?

Yes, to the tune of $2.7 billion in 2017. but it’s saddled by larger and longer-running issues than its work for Amazon. Beyond email’s assault on the handwritten note, the big financial dilemma is the agency’s yearly obligation to set aside cash to cover health care costs for future retirees. This accounts for billions in losses.

http://fortune.com/2017/07/16/amazon-postal-service-subsidy/

According the Sandbulte, Congress has barred USPS from setting its parcel prices below its costs, to keep it from unfairly undercutting competitors like FedEx and UPS. But the formula for calculating those costs, set in 2006, hasn’t kept pace as packages have come to make up a higher and higher percentage of USPS volume. The law set the share of infrastructure costs associated with packages at 5.5%, but boxes now make up around 25% of Postal Service revenue.


Sandbulte cites an April analysis by Citigroup that put a price tag on the resulting distortion. If package delivery bore its fair share of Postal Service system costs, each box would cost $1.46 more to deliver. That “subsidy” is systemwide, and the USPS has courted other large e-commerce companies.

But Amazon’s size means that it benefits disproportionately, and ships around 40% of its deliveries with USPS. In Sandbulte’s view, this means the Postal Service is “picking winners and losers in the retail world.”

But Sandbulte’s investment firm holds FedEx stock, meaning he has a direct interest in critiquing the USPS, and his analysis is debatable on several points. He disingenuously describes the pricing situation as “a gift card from Uncle Sam,” which implies there’s tax money involved. But the USPS doesn’t receive tax revenues.

Additionally, USPS’s legal duty to provide universal service means that even at a discount, shipping boxes for Amazon helps it generate revenue from potentially unused capacity. Fixed costs aside, USPS package delivery is profitable, helping subsidize rural service and letter delivery. So there’s room for disagreement about whether the situation is actually unjust.

 

[Chris0nllyn]

when has the USPS EVER run profitably

They had one profitable quarter in recent years, but that's about it.

So Citigroup was incorrect :shrug: Amazon is not getting a $ 1.46 below market rate

lets parse this ... but our researchers point out if that discount exists, it's not just for Amazon, it's a bulk-rate discount," he continued.

so did Trump say ONLY Amazon gets the discount or Amazon is getting a discount that is below market or cost




I'll add this ..... if the CitiGroup Report was flawed, and the challenges to the report are not widely circulated
how is it Trumps fault for tweeting out the facts from the CitiGroup Report
...

Citigroup produced a research paper based on assumptions. No one knows if they are wrong.

Trump did point out Amazon in a tweet. Multiple times. These are within the last week.

The Fake News Washington Post, Amazon’s “chief lobbyist,” has another (of many) phony headlines, “Trump Defiant As China Adds Trade Penalties.” WRONG! Should read, “Trump Defiant as U.S. Adds Trade Penalties, Will End Barriers And Massive I.P. Theft.” Typically bad reporting!

https://twitter.com/realDonaldTrump/status/981881669593559040

A am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!

https://twitter.com/realDonaldTrump/status/981168344924536832

Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed

https://twitter.com/realDonaldTrump/status/980800783313702918

While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars. The Failing N.Y. Times reports that “the size of the company’s lobbying staff has ballooned,” and that...

...does not include the Fake Washington Post, which is used as a “lobbyist” and should so REGISTER. If the P.O. “increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.” This Post Office scam must stop. Amazon must pay real costs (and taxes) now!

https://twitter.com/realDonaldTrump/status/980063581592047617
https://twitter.com/realDonaldTrump/status/980065419632566272

I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

https://twitter.com/realDonaldTrump/status/979326715272065024

Perhaps Trump did see the report and used his "$1.50" number from that. That doesn't explain his other tweets though.