Amazon and UPS have been quietly fighting over the post office’s cost structure — long before Trump


CNBC: President Trump isn’t the only one questioning the post office’s pricing strategy.

UPS, the shipping giant, has been in a back-and-forth with Amazon in recent years over the post office’s cost structure, which has direct impact on how the Postal Service sets its package shipping prices, according to public documents filed with the Postal Regulatory Commission (PRC).

In a February filing, for example, UPS called the post office’s cost distribution “puzzling,” to which Amazon responded in a separate filing that UPS offers “no evidence” of inconsistencies in the current system.

Though obscure, the issue impacts what Amazon — which relies heavily on the post office — pays for shipping, and could bring a competitive advantage either to the company — or to rivals like UPS….

“UPS makes a reasonable argument that needs to be discussed,” said Mark Jamison, a former postmaster of Webster, North Carolina, who has written about this topic for years on the blog “Save the Post Office.”“It’s worth discussing whether the postal service has the right strategy.”  Read more.


Downtown post office in Lufkin, Texas, closing temporarily, then relocating


Lufkin News: The Downtown Post Office in Lufkin, Texas, is only closing temporarily until an alternative site in close proximity to downtown is located, as the United States Postal Service doesn’t plan to renew the lease at the current location on East Lufkin Avenue, according to a USPS spokesman.

Downtown Post Office box holders received a letter Tuesday stating that the East Lufkin Avenue retail unit would officially close at 4 p.m. April 27 due to termination of the facility lease, which expires on April 30.

USPS Strategic Communications Specialist Robert S. (Sam) Bolen clarified in an email on Friday that the office would only be temporarily relocating services until a new downtown location could be secured.

“The downtown location is not closing, but is temporarily relocating operations to the Lufkin Main Post Office,” Bolen said. “The services offered at this location will be temporarily offered at the Main Post Office (MPO), 800 S. John Reddit Drive, while we search for an alternative site in close proximity to the downtown location.”  Read more.  (Photo: Google Street View)


East End post office in Richmond, VA, still shuttered after a year, and Postal Service has no timetable for reopening


Richmond Times-Dispatch: A year after the U.S. Postal Service shuttered the lone post office serving Richmond’s East End, the federal agency says it still does not have a target date for reopening the location.

The post office at 414 N. 25th St. — known as East End Station — closed in early April 2017 for safety reasons as a result of deferred maintenance.

“Final repairs are being completed,” said Freda Sauter, a Postal Service spokesperson. “The time frame to reopen the East End post office has not been determined.”

Reached by phone, the building’s owner, Joshua Bilder of Sterling Bilder Development, declined to answer questions about what repairs he made to the building, and referred questions about the time frame to the Postal Service.

When the building initially closed, Bilder pledged to make the repairs by summertime. Last December, Bilder told WTVR that he had fixed the roof and replaced lights. At that time, he said he expected the location to reopen by Christmas.

“All I can tell you is I’ve done my part,” Bilder told the Richmond Times-Dispatch on Thursday. “It’s really in the post office’s court, and you’ll have to talk to them about it.” Read more.


Postal Service to relocate retail services in Hampstead, Maryland


Carroll County Times: The U.S. Postal Service announced plans Monday to relocate retail services currently at the Hampstead Post Office on Houck Avenue in Hampstead, Maryland. A new site has not yet been determined.

The decision came after a community meeting and review of public feedback, according to a news release from USPS.

“The Postal Service is relocating its retail operation to a new space that suits the current requirements of the Postal Service and anticipates providing the same services at the new location as are currently provided to customers at the existing location,” according to the release. “The Postal Service’s goal is to select a new customer service location as close to the current site as possible.”  Read more.


Talk about Fake News: How a flawed Citigroup analysis led to Trump’s bogus tweets about Amazon and the Postal Service

SteveBlog, Story

President Trump is continuing his Twitter attack on Amazon over its deal with the Postal Service.  Yesterday Trump tweeted, “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. Also, our fully tax paying retailers are closing stores all over the country… not a level playing field!”

A couple of days ago, his tweets were more specific: “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….  If the P.O. ‘increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.’  This Post Office scam must stop.”

The attacks were in the same vein as his earlier tweets back in December.  They are apparently based on an op-ed in the Wall Street Journal by Josh Sandbulte published last July. Sandbulte claimed that each Amazon parcel was getting a $1.46 subsidy. “It’s like a gift card from Uncle Sam,” said the WSJ headline.

As Vox has noted, Sandbulte is a money manager who works for a firm that owns FedEx stock, but that may or not be relevant.  Anyone invested in mutual funds probably owns some FedEx.  In any case, he didn’t invent the subsidy idea.  It came from an analysis done by Citigroup published in April 2017.

The thesis of the Citigroup report is that taxpayers are essentially paying for the free shipping offered by Amazon.  As the Citi analysts write, “In this note, we examine the true profitability of the Post Office and show that by charging below market rates on parcel volume (mainly eCommerce) the Post Office has essentially turned free shipping into a future tax payers’ burden.”

The Citigroup report, it should be noted, is intended to give advice to investors in the stock market.  It claims that “a day of reckoning” is coming when the Postal Service will have to implement a significant increase in shipping rates, and this will provide a large “revenue opportunity” for the Postal Service’s competitors, FedEx and UPS — something on the order of $15 to $19 billion a year in additional revenue.  This, they say, “supports upside for both stocks.”

The Citigroup report is somewhat less bullish on Amazon because it will have to bear the brunt of rate increases by the Postal Service and also FedEx and UPS, who will be in a better position to raise rates themselves.  According to the analysts’ “worst case scenario,” Amazon will have to pay $2.6 billion a year in additional shipping costs.

As a closer look at the Citigroup report reveals, the case for a huge Postal Service rate hike on parcels is seriously flawed, and the report provides no evidence for Trump’s tweets that the Post Office is losing a fortune on the Amazon deal.

Before we get to the Citigroup report, it will be helpful to lay out a few basic facts about the types of U.S. mail, the way postal accounting works, and the particular service Amazon is using.  If you’re familiar with all this, you can cut to the chase and go to the section below on the Citigroup analysis.  Read More


What Trump Is Getting Wrong About the Postal Service and Amazon


Government Executive: President Trump has taken a keen interest in the relationship between the U.S. Postal Service and Amazon, though the facts he has presented on it are likely incorrect and based upon faulty assumptions.

The president has repeatedly fired off tweets castigating the federal mailing agency for maintaining what he views as a sweetheart deal to deliver packages for the online retail giant. He has accused the Postal Service of making Amazon “richer” and itself “dumber and poorer,” of being Amazon’s “delivery boy” and on Monday of losing “a fortune” in the agreement. The actual details of the USPS-Amazon arrangement are protected as a business secret, but the general outlines of such deals and oversight from the postal regulator virtually guarantee the Postal Service can make a profit.  Read more.


Trial Starts Monday on The U.S. Postal Service v. The City of Berkeley


Save the Berkeley Post Office: At 12 Noon on Monday, April 2, 2018, the lawsuit initiated by the United States Post Office and the United States Department of Justice against the City of Berkeley will come to trial. Back in August of 2016, the Feds initiated this suit in a challenge to the right of the City of Berkeley to pass a Zoning Overlay Ordinance designed to protect the character of the Berkeley Historic Civic Center District.

Defending against the full power of the United States Government is a lot to take on, a regular David vs. Goliath battle for the City of Berkeley. Fortunately, attorneys for the City of Berkeley have skillfully defended the Historic Civic Center Zoning Overlay.

The USPS/ DOJ argued that the Zoning Overlay results in a “total frustration” of the ability of the USPS to manage its assets.  At the Motion for Summary Judgment hearing on January 11, 2018, Judge William Alsup told the DOJ attorney that “…if it just comes down to we could get more (money for the Berkeley Main Post Office) without the overlay, you’re going to lose because that’s not total frustration.”

The trial on Monday, April 2nd, will be a bench trial before Judge Alsup. Both USPS/DOJ and the City of Berkeley are relying on the submittals before the court as of the January 11, 2018 Motion for Summary Judgment. Both sides will have one hour each to present oral arguments to Judge Alsup.

The trial is at 12 noon, Monday, April 2, 2018 in Courtroom 12, 19th Floor, 450 Golden Gate Avenue, San Francisco.

These three documents provide a good summary of the arguments to date:

  1. USPS/ DOJ argument for summary judgment
  2. City of Berkeley argument for summary judgment
  3. Transcript of the January 11, 2018 hearing on the competing motions for summary judgment

Looking back on the Amazon-USPS relationship on “Save the Post Office”

SteveBlog, Story

With all the news this week about the relationship between Amazon and the Postal Service, we thought it might be helpful to take a look back at the articles posted on “Save the Post Office” about the topic, most of them written by or with the help of former postmaster Mark Jamison. We were asking questions about the implications of the Amazon deals with the USPS from the very beginning, back in 2013, but getting answers, as Jamison explains in these articles, has never been easy because the details are kept secret.

Mysteries of the Amazon deal: Why the Postal Service is skimming the cream on Sundays (November 18, 2013)

It’s Sunday and the Postman Cometh: Mysteries of the Amazon deal, continued (November 30, 2013)

The Washington Post asks, Why not the Amazon Postal Service? (December 8, 2013)

Premature motion: PRC dismisses bid to view non-public Amazon docs (February 13, 2014)

Giving Away the Store: The Postal Service discounts the mail (April 17, 2014)

“We Deliver for Amazon”: The Postal Service’s New Priority (March 15, 2015)

When Titans collide: UPS petitions the PRC to change USPS costing methodologies (October 25, 2015)

Amazon deliveries and at-risk workers lead to more accidents and injuries at the Postal Service (March 8, 2016)


Community and Postal Workers United Spring 2018 Newsletter


The Spring 2018 newsletter from Community and Postal Workers United (CPWU) has articles about Postal Service workers in Key West, FL, protesting staffing shortages resulting in mail delays and an overextended workforce; the school strike in West Virginia, a reminder of the 1970 postal strike; a USPS #MeToo Moment in St. Louis; and more.  Read the newsletter here.


Search for new post office behind schedule in Foster City, Calif.


Daily Journal: After the post office in Foster City, Calif., was forced to close in January, city officials are urging the U.S. Postal Service to speed up the process of opening a new one, and in the meantime find a temporary location.

“I have concerns about how a prolonged closure of the post office in Foster City will inconvenience our residents and businesses,” City Manager Kevin Miller said in a press release. “The Foster City post office was heavily used by our residents, particularly seniors and others who rely on postal services in their daily lives.”

The U.S. Postal Service’s Charter Square Shopping Center location closed Jan. 31 because its lease expired and it had to make way for construction of a new elementary school, according to the release.  Read more.