Posted on 04/25/2020 4:56:55 AM PDT by SanchoP
The Postal Service is a joke because they’re handing out packages for Amazon and other internet companies, and every time they put out a package, they lose money on it,” Trump said.
The president commented on the postal service after reporters asked him at the White House about a possible bailout.
He argued that the postal service should raise their prices to help get them out of debt.
“The Post Office – if they raise the price of the package by approximately four times – it’d be a whole new ballgame,” Trump said. “But they don’t want to raise because they don’t want to insult Amazon.”
Treasury Secretary Steven Mnuchin said Friday that over $10 billion was authorized for a Postal Service loan in the coronavirus emergency rescue funding CARES act, but that the administration was demanding reform.
“We are going to put certain criteria for a postal reform program as part of the loan, and we’re [looking] forward to — the board is recruiting a new postmaster general and doing postal reform,” he said.
Trump said if the postal service did not raise their package prices, he would not authorize any aid.
(Excerpt) Read more at breitbart.com ...
Those in civilian clothes are temps. College kids, others who haven’t qualified by passing the testing required. Lot lower pay, they aren’t in the union.
You can make the case for covering the fixed costs but that only works if there is other revenue which turns a profit after covering all costs. I think the word profit is a foreign concept with the Post Office.
With large, bureaucratic organizations like USPS that are burdened with union rules that make for highly inefficient operations, more and more of their labor costs are fixed, not variable. The irony is that this "institutional inefficiency" makes it much EASIER for a third party like Amazon to come in and pay very little for the USPS services and still cover its variable costs.
Actually to be a casual, you have to pass the test. You just have an 89 day work limitation. They haven’t taken a full time job.
I would agree that absorption of overhead costs can be of real benefit, but there is also a limit to that. In other words, what about the increased labor costs, maintenance costs,, etc. the problem with chasing volume at the expense of good costing is that it is often a recipe for failure should something become out of whack.
Amazon started their own delivery business a couple years ago.....and many of Amazon deliveries to our house 1/2 mile from a paved road comes now in Amazon delivery vans........
Amazon has already started their own delivery service. I've said from the start that it would eventually be the company's downfall. They have to keep looking for opportunities to cut costs in order to keep their prices low, and their own contract drivers are a big reason why delivery service has declined considerably in many areas.
I agree. They’re not losing money because of Amazon, though. The USPS would be insolvent even if Amazon didn’t exist.
I did a term paper in graduate school on this very topic -- but in the railroad industry. The case study I used was a regional railroad that was operating regular weekly service between two points on its system 120 miles apart. Their typical train consist was two locomotives and 20-25 cars.
One new customer approached them asking about moving 1-2 carloads per week to replace the current service they were doing with trucks. The railroad had to be highly competitive here because the trucking cost was not ridiculously high, so they offered the customer a very low rate for these two carloads. It didn't cost the railroad much more to add 1-2 more cars to a train that was already operating on that line anyway.
Fast-forward a couple of years, and the customer's business grew so much that they were moving 8-10 carloads per week along the line. The railroad didn't think about this very much because they kept charging the same price to the customer even though the higher volume was forcing them to change their operations and incur additional costs.
By the time I was involved, the customer's volume had grown so much that the railroad was involved in discussions to operate a dedicated train for that customer along the route. The sales representative had to get his head screwed on straight by the operations people, because the guy still had this delusional idea that they could charge the same low rate to the customer even when the customer was responsible for nearly 100% of the variable cost of his service!
Rural America would not agree with you.
If the Post Office can't make money with that "yearly $billion subsidy" then what makes you think Amazon could?
around here a amazon prime van (a dodge promaster) is seen pulling up to our post office at about 4 am. They dump the whole van worth at the post office and they sort and deliver.
USPS is doing last mile delivery. The argument by the PO is “we are going to these addresses anyways” and for the most part they are right. someone has to bring the junk mail.
but my carrier says dealing with amazon makes his route longer. his 4 door jeep is packed with amazon packages. They recently made changes, before they would have to come up my drive and leave the package at my door, of course, this takes time (my driveway is not short by any means) now, if I didn’t have a rather expensive package box by my mailbox they would just leave a “sorry we missed you” slip and expect me to drive to town and get the package. essentially doing their job for them.
Sounds about right.
I've seen Amazon Prime vehicles making house deliveries but I suspect they're coming from a new Amazon facility about 5 miles from me.
I wasn't aware of it but when it opened not too long ago, they were on a hiring binge. It would have been a good time for me to apply for a job but they had already finished hiring when I found out about it this past fall......
There’s no way a stand alone Amazon delivery service is going to MAKE money. Where does that happen? Where else would you and I give a $billion to help cover the the cost of their deliveries, other than Amazon? We’re already doing it!
They use new, non-union employees.
It's not stand alone, it's part of Amazon. Or, more properly, thousands of independent contractors who do the business for Amazon. Amazon has been doing it for some time and it isn't meant to be a money maker but allow for a less expensive alternative to having the USPS, UPS, and Fed Ex deliver the packages for them.
Where does that happen?
Every city in the U.S. and no doubt a lot overseas as well.
Where else would you and I give a $billion to help cover the the cost of their deliveries, other than Amazon? We’re already doing it!
Leaving aside for a moment that package deliveries is actually a money-maker for the USPS then go ahead a jack up the delivery price four-fold. That will ensure you won't be delivering any packages for Amazon, or any other retailer. All that business will go to the competition. Then what happens to the post office?
And those union employees are, by and large, overpaid.
Plus the cost of the union pension plan is killing USPS.
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