Amazon reportedly considering ending ties with the US Postal Service
Amazon is reportedly considering discontinuing use of the US Postal Service and building out its own shipping network to rival it, according to The Washington Post. The e-commerce behemoth spends more than $6 billion a year on the public mail carrier, representing just shy of 8 percent of the service's total revenues. That's up from just shy of $4 billion in 2019, and Amazon continues to grow.
Over the past decade, Amazon has invested heavily in shipping logistics, buying its own Boeing planes, debuting electric delivery vans and slowly building out a drone delivery network. Last year, Amazon handled over 6.3 billion parcels, a 7 percent increase over the previous year, according to the Pitney Bowes parcel shipping index. USPS, for its part, handled roughly 6.9 billion, just a 3 percent increase over 2023. That is to say that Amazon's shipping network can already handle over 90 percent of the volume of the US Postal Service (at least by sheer numbers).
The USPS has been in dire financial condition for some time, losing billions of dollars a year. Negotiations between Amazon and the public carrier have reportedly stalled, which, together with the agency's need to keep raising its prices, may create more urgency for the company to eliminate its reliance on the service altogether.
The Postal Service has struggled to modernize and adapt (its attempt to electrify the truck fleet was a bust) in a market where the likes of Amazon and Walmart are investing billions in delivering packages around the country at lightning speed. The ever-accelerating digitization of communication and heavy investment in privately owned shipping operations threatens the very existence of one of the country's greatest public goods.This article originally appeared on Engadget at https://www.engadget.com/big-tech/amazon-reportedly-considering-ending-ties-with-the-us-postal-service-144555021.html?src=rss