[Ed. – The Washington Examiner piece puts this in terms of the Postal Service losing $1.46 on each Amazon package. But that just means the taxpayer picks up the cost. Taxpayer backstopping is how USPS operates perpetually at a loss. Trump is right: why should this continue?]
The Postal Service has a legal monopoly to deliver first-class mail and non-urgent letters. It is the only entity that can put something into a mailbox or through a mail slot. It is legally obliged to provide the service at the same level and price nationwide. That means, even with mail volume down 40 percent since 2006, the Postal Service still must visit 155 million mailboxes every day.
Since 2007, the Postal Service has been required to allocate 5.5 percent of its fixed costs to package delivery and to incorporate that into its pricing. That figure made sense then, but today, 25 percent of the Postal Service’s business is package delivery. And thanks to features of the Amazon deal – such as Sunday delivery, grocery delivery, even delivery from fish markets to local restaurants – the expenses have climbed. …
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.
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