
Amazon Should Acquire the US Postal Service - 80mph
https://observer.com/2019/06/amazon-us-postal-service-acquisition/
======
mikece
1\. The Post Office is a government sponsored entity mandated by the
Constitution —- Amazon cannot “acquire” it.

2\. The lie about the USPS losing money ignores that Congress requires the
USPS to pre-pay for 70 years of worker benefits. The truth is that left to
manage their own business the USPS would be making huge profits and pouring
them both into innovation and services as well as the US Treasury.

3\. The same interests which coerced Congress into making #2 happen will
recruit every logistics and retail competitor of Amazon to storm Congress with
lobbying and money to make sure Amazon can’t make the kind of deal suggested
in this article. Amazon is big but they would motivate an army of companies
across several industries to oppose them.

It’s far more likely that Amazon will start acquiring logistics companies and
ramping up their last mile service more aggressively.

~~~
BrentOzar
I was curious about how both of these could be true:

> 2\. The lie about the USPS losing money ignores that Congress requires the
> USPS to pre-pay for 70 years of worker benefits. The truth is that left to
> manage their own business the USPS would be making huge profits

So I did some quick reading[1] and in 2006, Congress mandated that the USPS
pre-pay for 70 years of benefits - but only gave them 10 years to do it
(2007-2017.) The payments were $5.6 billion per year. Okay, so that satisfies
part of the comment: if it wasn't for this law, the USPS would have a much
better cash flow picture.

Why $56 billion? For long term investments to cover the pension, the USPS is
only being allowed to invest in bonds, not stocks, real estate, etc. [3] This
meant their 2007-2017 payment structure was even higher (since bonds have
relatively low yields.) They currently have over $335 billion set aside for
future pensions, though, so between this position and the forced conservative
investment policy...I gotta say, suddenly the USPS is looking like one heck of
a good place to get a line-level job if you're worried about a recession.

So would they be making huge profits? Yes, but...they wouldn't be covering
their pension liabilities. What they'd really need to do is walk back some of
their pension guarantees (bad idea for employees), segue into employee-funded
retirement plans like 401Ks, or ... take the same risks as other big companies
did, and simply not pay their retirees their pensions (ouch.)

1: [https://www.govexec.com/management/2017/09/usps-defaults-
bil...](https://www.govexec.com/management/2017/09/usps-defaults-billions-
mandatory-payments-despite-scheduled-relief/141404/)

2: [https://www.uspsoig.gov/blog/be-careful-what-you-
assume](https://www.uspsoig.gov/blog/be-careful-what-you-assume)

3: [https://www.rstreet.org/2019/05/30/usps-pensions-vs-the-
worl...](https://www.rstreet.org/2019/05/30/usps-pensions-vs-the-world-more-
rules-worse-funding/)

~~~
TMWNN
>They currently have over $335 billion set aside for future pensions, though,
so between this position and the forced conservative investment policy...I
gotta say, suddenly the USPS is looking like one heck of a good place to get a
line-level job if you're worried about a recession.

Correct. Those who bring this up as proof that "Republicans hate the Post
Office" or somesuch don't understand (willfully or not) that the 10 years of
pain were always intended to be that, 10 years of pain. It's what any business
with pension obligations in a secularly declining market _ought_ to be doing;
USPS employees are fortunate in that its government masters forced the USPS to
do so.

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danabrams
So the company that was bullied away from building an office building in NYC
is going to convince the public it should acquire a beloved 250-year-old
American institution?

~~~
g00gler
Is the post office really beloved? Remember when Kramer wanted to stop getting
mail...

------
bhouston
These types of organizations are nearly impossible to reform quickly. There
are so many structures and interest groups.

This is where classic disruption comes in unfortunately. Or alternatively
great government leadership that reforms it over a significant period of time.

It would be a a fools errand to try to get Amazon's free market ideas on
delivery could easily take root in a large and old government institution.
Amazon is actually brutal to it's delivery workforce if you read the articles.

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onychomys
USPS employees are unionized. Given their history of treating their employees
like disposable units, I'm not sure Amazon would want to deal with that
headache.

~~~
ape4
I imagine Amazon would do something like Uber. Pay gig drivers with their own
vehicles to deliver.

~~~
speps
They already do that, it's called Amazon Logistics and it's a horrible service
compared to other options here in the UK (Royal Mail, UPS, Hermes, etc.).

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ENOTTY
Just as with Greenland, you can't buy something that isn't for sale

~~~
atemerev
Nearly everything is for sale, it is just the matter of the price. If
Greenland can’t be bought for 250 billion, how about 10 trillion? Or
exchanging it for Alaska? Or Hawaii? Granted, these options are not that
lucrative, but they establish the price points from which one could negotiate
to the mutual benefit.

~~~
jopsen
At some point the price is infeasible, and the difference from impossible
becomes a futile exercise in hypotheticals.

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outside1234
What I was expecting in this article was for Amazon to go big with their own
logistics such that Fedex goes bankrupt. Amazon then would pick up Fedex for
pennies and round out their logistics ability and totally be in charge of home
delivery as they would have an additional advantage over their competitors.

~~~
wil421
FedEx Ground wound be a great candidate since their last mike delivery is
already outsourced to 3rd party companies.

Couldn’t Amazon just start poaching FedEx’s 3rd party companies in large
markets?

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anm89
This would essentially be begging for antitrust regulation if for no other
reason than the optics.

Never going to happen.

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drivingmenuts
Oh hell no. I don’t use ground mail anymore unless I have to because my
mailbox gets stuffed with advertisements. Amazon takes over and that will be
unavoidable.

If the USPS allowed us to accept 1st-class mail only, I might be OK with it.
They bullied the mail-filtering services out of existence, so I don’t even
have any other options.

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tomohawk
> Amazon is a company of big thinkers.

And yet, they can't seem to avoid being a fence for fake products.

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mnm1
What a horrible idea, privatizing USPS, especially if it's sold to Amazon. The
stupidity is incredible. We're going to sell this to Amazon and leave it up to
them to decide who gets and who doesn't get mail now? We're going to leave it
up to them to deliver all our packages when they've proven they are incapable
of delivering their own? This would essentially put us, at least some of us,
in the pre pony express days. The incredible stupidity of privatizing such
essential services is simply unbelievable.

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aero-
If amazon was smart they would buy uber or lyft and leverage the last mile
free contractor network already in place.

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ykevinator
Why do people write these sensational low effort pieces?

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ksbakan
I guess Amazon can close the deal right after Trump finishes buying Greenland.

