It’s inevitable that a billionaire fixated on airing petty social grievances against his peers over Twitter would occasionally pick fights with the right enemies for the wrong reasons. Donald Trump’s recent call-outs of Amazon over what he claims is a one-sided contract with the United States Postal Service is just such an instance.
Trump has been taken to task in the media over his claim that USPS loses $1.50 on every Amazon package it delivers — a falsehood that likely originates in a Wall Street Journal op-ed written by a hedge fund manager with a heavy stake in FedEx. The president may or may not be aware that the Postal Regulatory Commission is charged with examining and confirming the profitability of the contract for USPS on an annual basis.
Rooted in poorly sourced talking points culled from the frothing enemies of all things public sector, Trump’s claims fit the well-worn conservative narrative of government largess rigged to exploit the taxpayer. Nevertheless, there’s a certain degree of truth to the insinuation that Amazon is getting the better end of its 2013 Negotiated Service Agreement with the Postal Service. In reality though, it’s not the federal balance sheet that’s hurting — it’s USPS’s thinly stretched, union workforce.
Going the Last Mile
The rise of e-commerce over the last two decades has been fueled by a private-sector “logistics revolution.” Led by companies like FedEx, UPS, and Amazon, networks of computer-directed hubs and SuperHubs allow shippers to move tens of millions of packages to individuals each day at incredible speed and cost-efficiency.
But while sophisticated optimization and coordination of delivery chains between hubs has been a major revenue driver for the corporations attempting to perfect it, improved efficiency and profitability in the so-called “last mile” of these chains is often far more difficult to attain.
Amazon operates more than one hundred so-called “fulfillment centers”— the final warehouse stop before goods reach the customer— in and around major cities. For customers living close to a fulfillment center, last-mile delivery is typically handled by part-time “Flex” drivers, who just have to download an app and pass a basic background check in order to jump into the logistics chain for as many or as few hours as they’d like to work.
The gigification of last-mile responsibilities is Amazon’s ideal scenario. But it’s only possible in areas where it’s profitable to run a fulfillment center. In many less-dense areas of the country, it simply isn’t profitable for logistics corporations like Amazon to handle last-mile deliveries themselves.
Instead, Amazon (as well as FedEx and UPS) frequently rely on USPS, which is legally bound to both remain profitable and guarantee universal nationwide service. This USPS mandate sharply distinguishes it from its private competitors — which only build delivery infrastructure and employ workers where it increases profitability.
USPS Workers Bear the Burden
In February, the Nation outlined the increasing toll the Amazon deal is taking on USPS’s sorters and carriers due to understaffing and aging delivery infrastructure designed primarily to handle paper mail. Since the 2013 Negotiated Service Agreement — which at the time was trumpeted as Amazon “saving” the Postal Service from insolvency — USPS has been forced to take on higher and higher volumes of packages without adequate funding to retool its operations for the changing nature of its work.
According to the National Association of Letter Carriers, the Amazon agreement puts added physical strain on clerks and delivery people, frequently leading to workplace injuries. Understaffed and crunched for time, individuals regularly lift heavy packages intended to be handled by multiple workers. For postal workers in areas of the country that Amazon can’t reach, the increased package load translates to added hours spent doing more physically rigorous work.
As part of the deal, USPS also agreed to begin delivering packages on Sunday for the first time in its history. To cover the extra hours, the Postal Service has increasingly hired lower-paid city carrier assistants, who aren’t entitled to the same pay and benefits as regular letter carriers. By accommodating Amazon’s demand for Sunday service and filling those shifts with lower-wage workers, USPS is playing by the lean, profit-driven rules of the private sector.
The Assault on Public Postal Services
Blame for the added strain placed on USPS workers by the Amazon deal can’t be pinned directly on Amazon — after all, it’s the responsibility of postal management to keep its operations fully staffed and modernized. But USPS has been forced to cut corners and to rely on the Amazon contract in the first place — by a “manufactured” budgetary crisis engineered in the halls of Congress.
The Postal Accountability and Enhancement Act of 2006 mandates that USPS cover the projected cost of its employee benefits seventy-five years into the future. The bill added $5 billion per year to the Postal Service budget, creating chaos for an agency that in the past had no difficulties remaining solvent. Under the pretext of accountability and fiscal responsibility, the law enjoyed support from both sides of the aisle. But the real intent behind PAEA seems to have been to promote the privatization of one of the United States’ oldest and most stable government agencies.
As a result, USPS has been forced to take on the difficult, last-mile delivery needs of the very same corporate interests that seek to replace it. From delivery drones to gig-economy “Flex” worker apps, companies like Amazon, FedEx, and UPS are working hard to eventually cut last-mile costs and eliminate their dependence on the USPS’s union workforce. Not only is USPS one of the largest middle-class employers in the United States — particularly for African Americans — it’s also legally mandated to serve residents in remote areas that private carriers may very well decide aren’t worth reaching. The privatization and marginalization of the Postal Service would be a national tragedy.
It’s a familiar narrative in the era of crisis capitalism and austerity. Government is called upon to provide services for the most expensive and marginalized segments of the population at the same time that it’s being cut out of potentially profitable market segments by privatization. In health care, Medicare and Medicaid are charged with caring for the poorest and most expensive patients. In education, charter school openings are frequently accompanied by public school closings. Many charters choose to eschew students with more expensive needs — forcing students to bus to the other side of the city to find a school offering a special education program.
Trump may have once again stumbled ignorantly onto a greater truth he doesn’t begin to understand — but don’t expect him to do anything about it. The right-wing think tanks that inspired the president’s dubious tweet storms didn’t raise these issues with the intention of alleviating the Post Office of its onerous and unnecessary prepaid benefit obligations. They’d like to see those benefits cut or eliminated entirely, followed by the jobs they’re attached to.