The Wall Street Journal says critics are raising concerns about the US Postal Service’s growing “last mile” delivery business. While the USPS has seen significant revenue growth from the service, some wonder if the agency is charging enough to make it worthwhile:
FedEx Corp.and United Parcel Service Inc. increasingly are moving their own packages through the U.S. Postal Service, putting pressure on the agency and raising questions about whether the USPS is charging enough for the service.
For FedEx alone, the post office delivers an average of 2.2 million packages a day, or about 30% of the express-mail company’s total U.S. ground segment.
According to the Journal, “Analysts estimate Amazon pays about $2 to mail a package via the Postal Service versus $7 or $8 for UPS or FedEx ground.”
The story also quotes PMG Pat Donahoe defending the program: “We make money on it. We wouldn’t do it if we didn’t make money on it,” but notes that neither the USPS or its partners will reveal the terms of their agreements.
Read more: U.S. Mail Does the Trick for FedEx, UPS – WSJ.