The Postal Service’s Last-Mile Strategy Is a Dead End
The Postal Service needs to avoid becoming a package dumping ground.
Photographer: Bess Adler/Bloomberg
As the US Postal Service moves forward with an auction for parcel companies to bid on its last-mile delivery capacity, Amazon.com Inc. is preparing in case it needs to pull out of the process and instead deliver those packages on its own.
This Amazon brushback pitch during negotiations shouldn’t come as a surprise. The e-commerce giant is a tough bargainer because it backs up the talk with action. Amazon is expanding its own delivery network, including a $4 billion investment to provide same-day and next-day service to small US towns. Amazon is seeking to reduce volume it sends to the Postal Service by two-thirds by this fall, when its contract expires, depriving the Postal Service of billions of dollars in revenue, according to a Wall Street Journal report.