So, Trump has said that the US Postal Service deal with Amazon is a bad one.

It’s not costing the USPS more than the USPS makes, to be clear, and it isn’t the cause of the USPS’s problems: That’s a result of having to pre-fund pension obligations that no other government organization or private firm has to do, so that even though the USPS is operationally in the green, it shows as is in the red.

This was passed by a Republican Congress in an attempt to kill the USPS, which they don’t like on ideological grounds.

However, the USPS does under-charge Amazon and other companies for last mile delivery.

David Dayen, whom I respect, made the argument. This is an argument I heard before Trump was president, though this version is dated in 2018:

Nobody has the delivery infrastructure of the USPS, which visits 150 million locations 6 days a week. Shippers like UPS, FedEx, and Amazon pay the USPS to access that delivery network and have USPS carriers deliver their packages.

In other words, USPS is letting competitors use its monopoly infrastructure to offload their least profitable package deliveries.

You’d think this would fetch the highest rates for USPS’ network, but actually it’s the lowest. Who offers this kind of cheap service to the companies they compete with?

The competitors don’t really have a choice but to use USPS, they don’t have this infrastructure in place. And yet USPS gives it away for a song. The rate also appears to be flat regardless of size and weight of the package. Mail carriers are lugging around 50-pound bags of dog food.

The USPS is also severely undercounting these outside packages as a percentage of overall deliveries. The accounting on this is pretty wild. The economics of this makes no sense. While pre-funding retirement benefits is the sole cause of USPS’ financial woes, this appears to be a tremendous missed opportunity.

 So, basically, the USPS could charge a lot more, and it would still make sense for Amazon and other private companies to pay what they charge, but the USPS doesn’t. It’s a bad idea, to people (especially Amazon) who can afford to pay more and who, no, aren’t going to replicate the USPS last mile delivery, because it is way expensive.

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