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Amazon isn't to blame for the Postal Service's woes, but it will need to innovate to survive

Amazon isn't to blame for the Postal Service's woes, but it will need to innovate to survive
From TechCrunch - April 8, 2018

First of all, its true that the Postal Service is losing billions of dollars a year$2.7 billion in 2017, to be more precise. In fact, the Postal Service has been losing money for over a decade. And the USPS does have a curious relationship with Amazon. While competitors UPS and FedEx charge the e-commerce giant $7-$8 per package, USPS only charges for $2 for the service. However, as with most stories, that of USPS is more complicated.

USPS and Amazon

The USPS-Amazon relationship may be seen as dumb by the 45th president, but to many its a piece of shrewd business on the part of the Postal Service. As of 2017, Amazon was USPSs biggest customer, and an intelligent way for the independent agencythat traditionally made its money by having a monopoly on first class mailto get a piece of the increasingly profitable package delivery pie. Its not the first time that the Postal Service has tried to muscle its way in on the growing package delivery industry. Back in 2010, the entertainment company Netflixaccounted for $600 million from its DVD subscription service. Of course, the Netflix DVD delivery service is fast fading and being replaced by on-demand streaming; and Amazon look to be preparing their own delivery service. It seems that the USPS may have to prepare itself to be jolted by another wave of disruption.

One-Two Punch of Email and a Financial Crisis

The Postal Services first major battle against the age of innovation came with the rise of email, and it didnt take the beating that you might expect. Despite the fact that in 2002 the majority of Americans used email, the Postal Service still managed to make profit between 2003 and 2006. During this time, people were still writing letters, sending greetings cards and, perhaps most importantly, bills were still sent by post.

It wasnt until the 2007 global financial crisis that the Postal Service took a hit that, arguably, it still hasnt recovered from. After thousands of businesses suffered from the crisis, they started to cut back on expenses wherever possible, and one such place was mail. Back in 2000, nearly two-thirds of bills were delivered by USPS, and the total revenue from bill payments in this year was estimated at between $15 and $18 billion. Between 2006 and 2010, USPS volume fell by 42 billions pieces, with 15 billion of those being caused by electronic billing.

Innovating within a Risk-Averse Government

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