On Wednesday, Amazon and other logistics and retail companies formed a lobbying group to keep the United States Postal Service (USPS) “reliable and affordable.”
In response to threats by the current U.S. administration about USPS subsidizing shipping services, Amazon, and other companies felt a need to protect their business model.
USPS Priority Mail shipping is also very popular among small businesses as USPS often provides competitive rates to ship small packages and parcels without having to negotiate contracts or pay for weekly pick up service.
In an interview with Reuters, John McHugh, the coalition chairman said:
“These companies just want to ensure that decisions are made based on a clear understanding of what the facts are. The package service portion of the postal service’s business model is one of the few bright spots. It makes money.”
Members of the new group include Columbia Sportswear (COLM.O), pharmacy benefits manager Express Scripts (ESRX.O), the National Retail Federation, package shipping firm OSM Worldwide, postal service company Pitney Bowes (PBI.N), Publishers Clearing House, and QVC.
A presidential task force is currently reviewing the operations of the postal service with a reporting deadline of August 10. Coalition members have already shared information with the task force and now are shifting their focus to a broader government and public outreach.
Together, the founding members of coalition pay USPS to deliver goods to more than 150 million U.S. homes and businesses.
Small and Micro Business Rely on USPS
While this coalition is made up of larger companies, the fact is that many small and micro businesses rely on USPS for fulfilling their orders.
As much as UPS and FedEx are expanding their businesses due to the growth in eCommerce, USPS does not charge residential surcharges, ships to P.O. Boxes, and picks up packages for free.
All features the carriers cannot offer or have to offer in conjunction with USPS. And many rural customers can only be efficiently serviced by USPS as additional rural surcharges make it extremely cost prohibitive for small businesses to use UPS and FedEx.
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