Amazon Acquires US Postal Service. Just Kidding - For Now.

Damn, but Amazon is clever. Delivery is becoming one of the major fronts in the war between the dominant digital enterprises. It is the proverbial last link between the merchant and the consumer, so controlling or leveraging it not only provides financial benefits but insures yet another reason why once people are inside that web, it is just easier to stay there than to use someone else's service or build one's own. Which is what Amazon is now doing by using the postal service to drop off groceries and make Sunday deliveries of any kind.

One of the issues facing Amazon, Google, Facebook and all the others trying to keep their hands inside your wallet is cost. Delivery is expensive. That is why the seemingly silly talk about using drones is not as far-fetched as it may sound. And setting up your own network to compete with UPS, FedEx and others? Expensive. Difficult. Complicated. And did we say expensive?

So what if there were an existing network with all of the equipment, workers and know-how? And what if they were desperate to earn more revenue and profit? And what if politicians opposed to the very notion of government and who consider the postal service a prime example of government waste just aching for a private sector solution were suddenly quieted by a partnership with a successful company happy to make use of that public resource? Hmmm. Sounds too good to be true. But it happens to personify the relationship between Amazon and the US Postal Service.

It's actually genius. Amazon gets a fully built system. It negotiates an arrangement, presumably favorable to its own interests, and - here's where it really hurts competitors - all that compensation, regulation, capital investment, health care and other tangible costs are borne by the US taxpayer. Amazon just pays a fee, the Postal Service has to worry about all the other stuff - and it's not Amazon's responsibility whether the USPS makes a profit or not. Nice, huh?

Now, if you are a US taxpayer and this offends you, well, tough nuggies. Vote for a new Congressman, assuming you bother to vote anymore. Privatization of public resources in the name of efficiency is the new reality. Groceries, Sunday deliveries, whatever can be shoved down that pipeline and for which a charge can be levied will do just fine. Maybe Amazon CEO Jeff Bezos should just do us all a favor and buy the Postal Service.He's making so much money from just employing them it may not make sense. But he could probably cut a deal to offset the additional price of local sales taxes he's now being required to pay.  The betting here is that he has already run the numbers. JL

Edward Chan reports in Reuters:

Amazon declined to comment beyond saying in a statement: "We are always looking for new and innovative ways to deliver packages to customers."

Amazon.com Inc has begun using the U.S. Postal Service to deliver groceries on a trial basis in the San Francisco area, in a potential boost for the online retailer's fledgling but gradually expanding "AmazonFresh" service.
The postal service began a 60-day trial in the first week of August, shipping small grocery parcels in insulated bags right to buyers' doorsteps between 3am and 7am in the morning, where demand for delivery is generally at its lowest.
Depending on how things go, the partners may consider expanding beyond the city and going nationwide, a spokeswoman for the postal service said.
Amazon's fast-growing business could give the cash-strapped postal service a shot in the arm. USPS has struggled with declining mail volumes and persistent losses for years, though its package-delivery business grew 6 percent to 3.7 billion packages in 2013.
The agency lost $2 billion from April to June, compared with a net loss of $740 million in the same period of last year.
The postal service is now trying to "determine if delivering groceries to residential and business addresses would be feasible from an operations standpoint and could be financially beneficial for the organization," the spokeswoman said in a statement.
Amazon declined to comment beyond saying in a statement: "We are always looking for new and innovative ways to deliver packages to customers."
It already uses the postal service for Sunday deliveries, and intends to roll out that feature to "a large proportion" of the country this year.
The company has steadily expanded its online grocery business, targeting one of the largest retail sectors yet to be upended by online commerce. The company has plans to launch AmazonFresh, which has operated in Seattle for years, in roughly 20 urban areas in 2014, including some outside the United States.