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RUMOR - USPS being sued for giving preferential treatment to Amazon

Started by Pink Jazz, August 04, 2017, 02:05:35 PM

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Pink Jazz

According to a post on a forum by rural postal mail carriers, a lawsuit has been brought against the U.S. Postal Service by several companies for giving preferential treatment to Amazon packages.  From what I understand, the reasons are that they are giving Amazon lower rates yet receiving better quality service, plus the Sunday delivery.

If this lawsuit goes through, I would how will Amazon delivery be affected in many areas?  Will this be the end of Sunday delivery?  Since Amazon Logistics is not available everywhere, the USPS is the only other carrier that offers Sunday delivery for Amazon as far as I know in areas that are not served by Amazon Logistics.  Even in areas that are served by Amazon Logistics, the USPS provides a lot of the overflow.  If Amazon forms a similar partnership with UPS or FedEx, competitors could potentially claim they are giving Amazon preferential treatment (although I think Walmart is a larger FedEx customer than Amazon) in a similar way that the USPS is currently doing.


Life in Paradise

The US Postal Service already delivers some items that are shipped UPS.  I'm not sure what the criteria is for when this happens, but perhaps someone can explain.

realjd

Amazon pays the USPS big bucks for that service, especially the Sunday delivery. Other companies are welcome to negotiate similar shipping contracts also.

Pink Jazz

Quote from: Life in Paradise on August 04, 2017, 03:49:59 PM
The US Postal Service already delivers some items that are shipped UPS.  I'm not sure what the criteria is for when this happens, but perhaps someone can explain.

There are two services that UPS does that - UPS SurePost and UPS Mail Innovations.  UPS SurePost uses the UPS Ground network to ship to a post office with the USPS making the last mile delivery, and is primarily designed for packages weighing up to 10 pounds.  UPS Mail Innovations operates on a separate network on a consolidation model to ship to a post office and is designed for packages weighing less than 1 pound.

FedEx also offers a competing service known as SmartPost.  It is somewhat of a hybrid of both SurePost and Mail Innovations as far as the service goes.  Like SurePost, it is primarily designed for packages weighing up to 10 pounds, but operates more like Mail Innovations on a consolidation model using a network separate from the standard Ground/Home Delivery network.

HazMatt

I believe it.  It's almost assuredly a combination of mis-management and the union contract stipulations on non-career/non-union employees, which would compose a large majority of the Sunday workforce.  There's a Sunday premium (25% I think), and there are also limits on how much non-career employees can work and how many non-career employees can be hired.  It's some percentage of career employees, used to be 10-15%.  There's almost assuredly a systemic push to cut down on Sunday hours as much as possible, so I imagine there's a push to get rid of Amazon packages as early as possible to prevent a need for Sunday delivery.

Pink Jazz

Quote from: HazMatt on August 04, 2017, 06:59:49 PM
I believe it.  It's almost assuredly a combination of mis-management and the union contract stipulations on non-career/non-union employees, which would compose a large majority of the Sunday workforce.  There's a Sunday premium (25% I think), and there are also limits on how much non-career employees can work and how many non-career employees can be hired.  It's some percentage of career employees, used to be 10-15%.  There's almost assuredly a systemic push to cut down on Sunday hours as much as possible, so I imagine there's a push to get rid of Amazon packages as early as possible to prevent a need for Sunday delivery.


From what I read, the lawsuit is from Amazon competitors, not from USPS employees.

Pink Jazz

Some details that I understand about the lawsuit are due to the steep discounts that Amazon receives, and Sunday delivery.

About the discounts, note that UPS and FedEx receive discounts for last-mile delivery for their SurePost and SmartPost services, respectively.  If UPS and FedEx receive discounts for their SurePost and SmartPost services, why should Amazon be forced to pay full price for the USPS to deliver the last mile?  That seems pretty hypocritical.

Scott5114

It's really more about anti-trust concerns more than anything. Amazon can afford to enter into these huge contracts to get preferential treatment of packages. Small businesses like mine simply cannot, as we don't have $1 million sitting around to spend on shipping (and if we did, there's way more important things to spend the money on first). That gives Amazon an advantage I don't have and therefore could cause a customer to choose another brand on Amazon instead of mine.

The rates UPS and FedEx receive are a different story because they are, in effect, USPS's competitors, so it's more of a collaboration between shipping systems rather than favoring one customer over another.
uncontrollable freak sardine salad chef

Pink Jazz

Quote from: Scott5114 on August 08, 2017, 05:58:37 PM
It's really more about anti-trust concerns more than anything. Amazon can afford to enter into these huge contracts to get preferential treatment of packages. Small businesses like mine simply cannot, as we don't have $1 million sitting around to spend on shipping (and if we did, there's way more important things to spend the money on first). That gives Amazon an advantage I don't have and therefore could cause a customer to choose another brand on Amazon instead of mine.

The rates UPS and FedEx receive are a different story because they are, in effect, USPS's competitors, so it's more of a collaboration between shipping systems rather than favoring one customer over another.


Amazon now has their own last mile delivery service in some major cities, Amazon Logistics, so Amazon is already competing in some cities. USPS serves many of these areas within the range of an Amazon Sortation Center, but outside the range of Amazon Logistics. USPS also provides a lot of the overflow capacity, particularly for two-day Prime orders (since Amazon Logistics deals a lot with same-day and one-day).



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