Technology giant Amazon is pushing, through its lobbying organs, to keep its USPS shipping rates artificially low, an indirect taxpayer subsidy to the market-dominating online retailer that comes at the expense of both small businesses and other customers of the USPS mail service.
Amazon has long relied on cheap shipping rates from USPS to avoid taking on the cost of building its own logistics network. In 2019, Bezos summed up the importance of USPS to his business, saying, “I didn’t have to build a transportation network to deliver the packages. It existed: It was called the post office.”
Jeff Bezos holds up an Amazon device (David Ryder /Getty)
Primarily through the Package Coalition, which Amazon funds, Amazon lobbies to keep USPS package shipping rates artificially low. This lobbying campaign for below-market shipping rates has intensified even as the demands on the USPS have ratcheted up in recent years due to the rapid rise of e-commerce shipping, a trend that was accelerated by the coronavirus pandemic.
Amazon Employee, Warehouse (Ross D. Franklin/AP)
This has come at a cost to customers of the traditional USPS mail service. Increased demands from package shippers like Amazon have forced the USPS to re-allocate resources from mail delivery to package delivery.
Analysts have confirmed that the USPS uses its traditional mail service, along with its tax exemptions and access to treasury loans to support its surging package delivery business. Meanwhile, delivery times in its traditional mail service continue to stagnate.
By lobbying to keep USPS package shipping rates artificially low, while at the same time dumping its unprofitable business – i.e. rural delivery – onto the USPS, Amazon and the Package Coalition are bankrupting the USPS.
During coronavirus, the taxpayers provided $10 billion in relief funding to the USPS. Amazon and the Package Coalition aggressively lobbied for the money, which was quickly used to cover the demands of package shipping.
When taxpayers come to the rescue, as they did during the pandemic, and as the Amazon-funded Package Coalition is asking them to do so again with another huge taxpayer bailout, Amazon is likely to be the beneficiary.
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