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The postal service's deal with Amazon: A positive harbinger?

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Thursday, Nov. 14, 2013, 8:55 p.m.
 

Technological innovation — email and text messaging — has made first-class mail a dwindling, money-losing business for the U.S. Postal Service. But now, logistical innovation — delivering e-commerce giant Amazon's packages on Sundays — points the way toward 21st-century postal service relevance and financial stability.

Indeed, this contract — bringing Sunday Amazon package delivery to the New York City and Los Angeles metro areas for this holiday season, elsewhere next year — begs the question of why the postal service took so long to sign such a deal. Financial terms aren't being disclosed, according to The New York Times, but the contract does capitalize on the service's strengths.

From 2008 to 2012, annual first-class mail volume declined from 92 billion pieces to about 69 million, revenue from nearly $75 billion to $65 billion. But the postal service's package business grew, to about 3.5 billion pieces and $11.6 billion in revenue — and is profitable amid nearly $16 billion in 2012 losses.

The postal service expects similar deals with other merchants. That means brighter prospects regardless of whether Congress lets it end Saturday first-class delivery, raise postage rates or reduce its unique, thrice unmet obligation to pay $5.5 billion annually toward future retirees' health care.

The Amazon contract, the most exciting step the postal service has taken in ages, invigorates an operation too long stuck in the past. Hopefully, it's the first of many innovations to come.

 

 
 


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