On Monday, November 11, Amazon.com announced that it had struck a deal with the United States Postal Service (USPS) that will enable the online retailers to offer Amazon Prime customers Sunday delivery. The Sunday service is already open to Prime customers in New York City and Los Angeles, as reported by Wired.com. Ironically, Amazon made the announcement on a day that USPS was closed.
USPS noted that under the program it will for the first time deliver packages at regular rates on a Sunday, whereas previously, consumers had to pay an extra fee for delivery on that day, as reported by the Washington Post. Sunday delivery is expected to branch out to the rest of the country next year, the USPS told the Post. Much of the media coverage of the new agreement focused on whether the partnership with Amazon would help the cash-strapped agency with its turnaround efforts. Last November, the USPS reported a record $15.9 billion net loss for the fiscal year, as reported by the New York Times.
USPS spokesperson Sue Brennan told BTW that the Amazon-USPS deal is the first negotiated service agreement for Sunday delivery. “We’d be happy to speak with any other major shipping companies who may be interested in something similar,” Brennan said. She would not say which party initiated discussion regarding the agreement, terming it “collaborative.”
While many assume that the USPS no longer takes taxpayer money, that is not entirely accurate: Congress provides USPS with $100 million a year to “compensate the agency for revenue loss by providing, at congressional direction, free mailing privileges to blind people and overseas voters,” as reported by PolitiFact.com.
While many business pundits hailed the move as a win-win for both parties, ABA CEO Oren Teicher took issue with the USPS playing favorites with one retailer.
“We find it disconcerting that a quasi-government agency would enter into a special business arrangement with one private corporation in a field with many competitors,” said Teicher. “The postal service’s role is not to pick favorites among competitors but to provide equal access for all retailers looking to take advantage of its delivery infrastructure. Considering that state governments already subsidize online retailers like Amazon.com by allowing them to sell into the state without collecting and remitting sales tax — thereby placing Main Street retailers at an unfair disadvantage — news of an arrangement like this, at the start of the holiday season no less, simply adds insult to injury. Moreover, allowing a private corporation to purchase the services of a government agency without a thoroughly transparent and open process sets a very dangerous precedent. We hope Congress will take a good hard look at this.”