How Much Does Amazon Pay The Us Postal Service To Deliver A Box
The U.S. Post generated $1.6 billion in profit from Amazon in its 2019 financial year, on $three.9 billion in acquirement from its business with the e-commerce giant.
That's 1 of several revelations about the USPS in a Washington Post report Thursday, citing internal USPS emails and financial statements obtained by the American Oversight watchdog group through a public records request.
The numbers announced to debunk repeated claims by President Donald Trump that the U.Due south. Mail service loses coin on Amazon whenever it ships a package.
President Trump has repeatedly criticized Amazon and its CEO Jeff Bezos, who owns the Washington Post, over the issue. The president has called on the USPS to enhance the price of delivering packages for Amazon.
President Trump says the U.Southward. Post "have to" raise prices for delivering packages for Amazon.
USPS has become a focal bespeak for Congress and the 2020 election https://t.co/sCnjaLeWXv moving picture.twitter.com/OBMxnYS1rl
— Bloomberg (@business) August 17, 2020
But the documents, posted past American Oversight, betoken that Amazon does generate a profit for the USPS, in some cases at a significant rate.
"While Amazon is the USPS' largest package customer ($three.9B of revenue in FY19), information technology represents <10% of USPS total annual revenue, and is a high-contribution human relationship (>150% cost coverage in its largest product human relationship)," reads i of the documents.
The certificate, entitled "Brief on Amazon-USPS Relationship," includes a list of "Fact-checking Statements" responding to President Trump'due south comments almost Amazon during a Coronavirus Task Force Briefing.
The Post says the brief appears to take been circulated inside the Post Part, although the author and origin aren't clear from the documents as made public.
This is the document that discloses the FY19 revenue of $3.9 billion and profit (contribution) of $one.6 billion from Amazon in financial 2019.
It adds, "USPS derives incremental margin dollars from every bundle, for every product, for every client. Package business (both concluding-mile and full-network) represents a internet comeback in profitability for USPS versus a detractor."
The U.Southward. Post'south yearly loss doubled to $8.viii billion last twelvemonth. The memo attributes the fiscal challenges to unfunded government mandates and restrictions, such as the requirement for equitable pricing across geographies, and obligations to pre-fund employee retirement, amongst other factors.
Meanwhile, Amazon has been aggressively building upwardly its ain shipping and commitment capabilities, to supplement its apply of the USPS and UPS, the company says.
A new written report Thursday from analyst Marking Mahaney at RBC Capital letter Markets says Amazon could reduce its shipping costs by relying more on its own logistics and delivery networks, known in the industry as "AMZL."
The report says Amazon "will soon be handling delivery from desktop to doorstop for 85% of all its packages," roofing lxx% of U.South. households.
"Nosotros estimate that Amazon could salve $ii-$6B in terminal mile commitment costs, by further expanding its AMZL network," the written report says. "Amazon volition be able to reduce its reliance on [third-party] services like USPS (30% of 'xix AMZN U.South. deliveries) and UPS (20%) which mitigates risk of potential supplier price increases."
Other documents reported past the Washington Mail service draw tension between Amazon and the U.South. Postal service in contract talks. According to the Post report, the documents reflect Amazon's uncertainty over the status of the U.S. Mail Role. They list questions from the company such every bit, "What does the USPS wait similar in the new few weeks, the next few months and the next several years?"
In response to a GeekWire inquiry, Amazon said it had no further comment beyond its argument in the Post story: "For more than than two decades, Amazon has partnered closely with the United States Postal Service to invent and evangelize for our customers, which has resulted in significant revenue for the USPS and thousands of American jobs. USPS continues to exist a bang-up partner in serving Amazon customers."
As of Thursday afternoon, American Oversight says the USPS has asked the group to pull down the records that the agency produced under public records laws, "claiming they had been improperly released." See its site for the latest.
Source: https://www.geekwire.com/2020/internal-documents-say-u-s-postal-service-made-1-6b-profit-amazon-fy2019/
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