All over the country, families are beginning preparations for the holiday season. Many who run their own shops or depend heavily on small businesses will make shipping arrangements for a variety goods, gifts, marketing items and other important materials and resources all throughout their communities.
Unfortunately, for many American consumers and business owners, it will cost more than it ever has to use the United States Postal Service (USPS) because of unfair deals that the USPS strikes with large shipping partners like Amazon. These deals lock in below-market rates for certain companies, making them immune to peak season rate hikes, like the one we are currently experiencing during this holiday season.
Every year, the Post Office negotiates these lucrative deals with large companies—giving minimal consideration to family businesses—to subsidize their high number of deliveries. This happens every year but little, if anything, is revealed to the public.
With its massive package volumes, Amazon has access to these negotiated service agreements, while small family businesses that make far fewer deliveries do not. In essence, Amazon receives corporate welfare in the form of underpriced package deliveries. It’s costing taxpayers an untold amount. The Postal Service is currently $188 billion in debt, and is now asking for a multi-billion dollar taxpayer bailout.
The fact that USPS gives away its services at below-market prices to one of the world’s largest companies, while demanding additional taxpayer support, is simply unfathomable. Sweetheart deals for large corporations disadvantage mom and pop businesses, leaving them on the hook for peak surcharges, while e-commerce behemoths take advantage of backroom arrangements to subsidize their immense shipping activities.
It is unfair for USPS, as a government agency, to punish Americans who simply want to use its public service to connect with their customers, neighbors and families across cities and states.
This holiday season, pricing increases come into effect without any degree of transparency about who pays surcharges and who does not. The immense discrepancies between those who deliver at a high volume and those who may deliver less will remain.
Innumerable family-owned businesses across the country serve communities that lack access to large retail and consumer good stores. For these areas, family businesses passed from generation to generation serve as lifelines. Those that face pricing burdens from USPS must pass the costs onto consumers who will not only pay more, but also have to deal with slower deliveries of their items.
USPS’s sweetheart deals represent one more devastating hurdle for small business owners during a year in which they have been forced to endure a pandemic that has devastated their livelihoods. There is no good reason for the Postal Service, a constitutionally mandated, public service institution, to hand small businesses a new disadvantage by subsidizing competitors with a market cap larger than many countries’ GDP. If these exorbitant discrepancies continue, some family businesses may have to close their doors and put out “for lease” signs on their buildings.
This holiday season, as the USPS faces multi-billion-dollar financial losses, it is adding insult to injury by making its primary services slower. Going forward, it is critical for leaders in Washington to reflect on whether the Postal Service should continue subsidizing Amazon, or become an asset to everyday Americans and their companies—to ask whether Amazon needs discounted services more than a father-son hardware store, or a third-generation used book store.
It is time for the Postal Service to stop secretly subsidizing Amazon. As the calendar moves past Thanksgiving and into the prime holiday season, now is the moment for the USPS to focus on its primary job and prioritize those who need it most.
Palmer Schoening serves as the Chairman of the Family Business Coalition, a diverse collection of organizations united for the common purpose of protecting America’s family businesses across the country.