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Subsidized Shipping is Costing the USPS & Americans

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It seems that the post office is unable to negotiate deals with shippers without losing money. First we have their deal with Amazon that nets the post office a big fat loss of $1.46 on every package it delivers for the behemoth. Then we have the subsidized shipping agreements such as ePacket that the post office has with China, South Korea and other foreign countries. This allows someone in China to ship a package to the United States at a reduced (subsidized) rate.

One has to wonder why the President is focusing so much of his attention on Amazon with no mention of the subsidies that these foreign countries enjoy while Americans are stuck paying ten times as much in some cases to ship packages overseas.

The post office gets paid $1.50 to ship a one-pound package from China to the United States with the average price for a 1 pound package being a little under $4.00 in shipping charges. In stark contrast if you ship a one-pound package from the United States to China via priority mail the cost is around $49.00. That $1.50 does not cover the costs involved in the shipping process and the losses in 2013 from ePacket and the Universal Postal Union treaty were 70 billion dollars.

Subsidized postage rates for not only Amazon but foreign countries are costing the United States Post Office revenue to keep their business afloat and it is also costing businesses in the United States who are being forced to compete with foreign owned businesses on an uneven playing field with ridiculously low shipping prices. Not to mention Congress gives the post office 18 billion dollars in taxpayer money every year.

So while the President is right that changes are needed all the reasons the post office is having difficulties need to be addressed. Until we address the actual proverbial elephant in the room the post office will continue offering subsidized rates to China and other countries and continue making bad deals with companies like Amazon to ship their packages. All the while their balance sheets will get further into the red and the American consumer and business owner pays more for postage and shipping each year.

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Rachel Wilson

About the Author:

Writer, cat lover and passionate supporter of buying American made and American manufacturing. Looking forward to seeing more products on store shelves that are Made in the USA.
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