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  #51  
Old 04-26-2020, 06:41 PM
Ravenman is offline
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Originally Posted by Derleth View Post
And the USPS isn't set up to deliver to some of the addresses UPS and FedEx deliver to. ...

BTW, my place didn't even have the gang box. I rented a P.O. Box in town or I didn't get USPS mail.
Does UPS or FedEx deliver to your house?
  #52  
Old 04-26-2020, 06:44 PM
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Actually Ravenman there are places where the parcel carriers will deliver to your door and the USPS will not, and places where USPS does and the parcel carriers won't. The USPS does have a mandate/policy to at least put a delivery point as close as viable to the maximum number of people, as part of the support for rura population UltraVires describes, but it's not an absolute mandate to find your cabin in the middle of the woods.
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Originally Posted by UltraVires View Post
That was a question I came to post. Amazon ships a massive amount of packages via USPS. Wouldn't any company that large doing business with another company get a quantity discount? And to the extent you want to call that a "subsidy" doesn't every rural customer (or a sender to a rural customer) get a similar subsidy?

If Grandma sends you a handwritten letter, she pays the same 55 cents whether you live in the middle of town, or outside of town up a mountain road. Whether that is a good idea or not, it was one made many years ago to allow rural people to have the same access to the outside world as people in town, and we see a lot of the same thing with subsidized broadband internet, or rural electrification.

Why is Amazon suddenly the bad guy for using the same infrastructure as everyone else?
Yes, that's a headscratcher there in wherever Trump is supposed to be going with this.

Is he actually proposing that the USPS discriminate against Amazon in denying it deals they'd make with other volume customers, or even in outright upfront pricing? Or to force USPS to renounce offering any type of volume consideration or third-party "last mile" service in those places where it's available?

Last edited by JRDelirious; 04-26-2020 at 06:49 PM.
  #53  
Old 04-26-2020, 07:04 PM
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I'd think the "last mile" package deliveries would be a good deal for the USPS; Amazon, FedEx or UPS drop off a bunch of packages to a local post office, and the mail carriers deliver them to the individual addresses that they already visit six days a week.

Last edited by Dewey Finn; 04-26-2020 at 07:05 PM.
  #54  
Old 04-26-2020, 07:19 PM
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Originally Posted by JRDelirious View Post
Yes, that's a headscratcher there in wherever Trump is supposed to be going with this.

Is he actually proposing that the USPS discriminate against Amazon in denying it deals they'd make with other volume customers, or even in outright upfront pricing? Or to force USPS to renounce offering any type of volume consideration or third-party "last mile" service in those places where it's available?
The only argument I can make out is something along the lines of: Amazon makes go-jillions of dollars per year. A big feature of their products is the fast and low cost shipping. When Billy Jo Countryboy orders items on Amazon, the taxpayers are subsidizing the delivery to the end of his road located way out in the sticks. Amazon therefore takes advantage of this subsidy by charging lower prices and making go-jillions. Why should Joe Q. Taxpayer be putting more money in Jeff Bezos' pocket?

Well, first, it just reeks of a Bernie Sanders stick it to the rich argument that I'm surprised any Republican would get near. Second, it is horribly shortsighted because the subsidies are there for Billy Jo, to get things shipped to him at cheaper prices, not for Amazon. Finally, it seems like taking this sort of action would just cut USPS's own throat because with the advent of electronic communication, there just isn't that much paper stuff to be sent. Amazon supplements USPS business (if not keeps it afloat entirely) by the massive amount of stuff it ships, even if it does get a discount relative to other shippers, and as said before, there is nothing unusual about that.

If there is another argument to be had for this, I'm willing to hear it. But what did Amazon do to piss off Trump anyways? Do they compete against any of his businesses? I thought he was in real estate and the like. It shouldn't bother him a bit what Amazon is doing.
  #55  
Old 04-26-2020, 07:55 PM
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Jeff Bezos made his billions the old fashioned easy. He earned it.

Unlike a certain real estate developer who only started out with «a few millions» from his father.
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  #56  
Old 04-26-2020, 08:36 PM
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Originally Posted by Ravenman View Post
Does UPS or FedEx deliver to your house?
Yes. I thought I said that.
  #57  
Old 04-26-2020, 09:04 PM
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If there is another argument to be had for this, I'm willing to hear it. But what did Amazon do to piss off Trump anyways? Do they compete against any of his businesses? I thought he was in real estate and the like. It shouldn't bother him a bit what Amazon is doing.
Jeff Bezos bought the Washington Post. QED.
  #58  
Old 04-26-2020, 09:06 PM
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I'd think the "last mile" package deliveries would be a good deal for the USPS; Amazon, FedEx or UPS drop off a bunch of packages to a local post office, and the mail carriers deliver them to the individual addresses that they already visit six days a week.
It is. I think they’re just playing games with numbers.

The US Postal Service loses money every year. One of my cites has says they lost 2.7 billion in 2017- I don’t have the more recent numbers. And if you divide that number by the number of Amazon packages that the USPS delivers, you could come up with a statistic that claimed “The postal service loses $x for every Amazon package they deliver.”

https://gen.medium.com/confessions-o...d-a6e96f125126

https://postalnews.com/blog/2018/12/...8-top-10-list/

But before they started working with Amazon and other carriers, they were losing 16 billion a year. They make money on package delivery, just not to offset the rest of the operation - it’s the things like first class mail and catalogs and operating retail post offices that kill them financially. Package delivery helps offset that.
  #59  
Old 04-26-2020, 09:25 PM
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Also Amazon is not required to provide fully funded retirement for 75 years into the future. The USPS is required to fund retirement for future employees that are not born yet. It's been a plot since the Bush years to make the USPS "uncompetitive" and loss making with BS like this.
  #60  
Old 04-26-2020, 09:36 PM
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If there is another argument to be had for this, I'm willing to hear it. But what did Amazon do to piss off Trump anyways? Do they compete against any of his businesses? I thought he was in real estate and the like. It shouldn't bother him a bit what Amazon is doing.
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Jeff Bezos bought the Washington Post. QED.
Right. Personal/political grudge that makes him very willing to listen to those who'd further cripple the USPS.
  #61  
Old 04-27-2020, 04:00 PM
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a couple months ago I met someone who delivers mail in a very rural area , the whole county has around 7k people. She is a contractor , not a USPS employee. She drives her own car and she gets paid a flat rate per day no matter how long it takes. I think that setup is common in rural areas.
  #62  
Old 04-27-2020, 04:31 PM
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The only argument I can make out is something along the lines of: Amazon makes go-jillions of dollars per year. A big feature of their products is the fast and low cost shipping. When Billy Jo Countryboy orders items on Amazon, the taxpayers are subsidizing the delivery to the end of his road located way out in the sticks. Amazon therefore takes advantage of this subsidy by charging lower prices and making go-jillions. Why should Joe Q. Taxpayer be putting more money in Jeff Bezos' pocket?.
But the taxpayer isn’t subsidizing Amazon. USPS depends on revenue from stamps and packages, not taxpayer dollars.

But, I’m sure there are people who mistakenly believe this, and feel very strongly that this imaginary problem is VERY IMPORTANT!

Come to think of it, Trump probably thinks this way.
  #63  
Old 04-27-2020, 04:40 PM
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If Bezos cured cancer and Trump had cancer he would probably turn down the cure out of spite.
  #64  
Old 04-27-2020, 04:57 PM
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Yes. I thought I said that.
I didn’t see it. Interesting. I lived in a place where UPS used USPS for the last mile, but I wasn’t aware of places where UPS did deliver but USPS didn’t.

So why do you have to rent a PO Box when others have linked to cites showing that the USPS has a legal obligation to universal mail delivery?
  #65  
Old 04-27-2020, 06:00 PM
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We have a big office park , Research Triangle park with 100 companies and 50,000 employees but nobody lives there. The USPS makes the businesses come to the PO to get their mail. The companies could request delivery but they seem OK with the current setup. It's been that way for over 50 years.
  #66  
Old 04-27-2020, 06:43 PM
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But the taxpayer isn’t subsidizing Amazon. USPS depends on revenue from stamps and packages, not taxpayer dollars.
You're right. And you would have seen that I said the very same thing in my next paragraph that you didn't cite. The taxpayers do not subsidize Amazon. They subsidize rural delivery by requiring the USPS to deliver items out in the sticks at the same price as they would to deliver packages in town.

And the hypothetical argument, which I entirely made up to try to see if there was any logic behind it, was that Trump was arguing that Amazon was taking advantage of this subsidy by delivering their own packages to rural customers at this low cost.

There are plenty of things we disagree on. You don't need to argue with me when I agree with you.
  #67  
Old 04-27-2020, 06:46 PM
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As I side note, isn't "General Delivery" still an option? Can't someone address a letter to:

General Delivery
c/o Ultravires
MyTown, WV

and when I show up asking the postmaster if he has anything for me, he will hand it to me?
  #68  
Old 04-27-2020, 06:53 PM
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As I side note, isn't "General Delivery" still an option? Can't someone address a letter to:

General Delivery
c/o Ultravires
MyTown, WV

and when I show up asking the postmaster if he has anything for me, he will hand it to me?
Yes it is still an option. People on long hikes like the Appalachian Trail will use that to mail food and supplies they can pick up along the way.
  #69  
Old 04-27-2020, 07:16 PM
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You're right. And you would have seen that I said the very same thing in my next paragraph that you didn't cite. The taxpayers do not subsidize Amazon. They subsidize rural delivery by requiring the USPS to deliver items out in the sticks at the same price as they would to deliver packages in town.

And the hypothetical argument, which I entirely made up to try to see if there was any logic behind it, was that Trump was arguing that Amazon was taking advantage of this subsidy by delivering their own packages to rural customers at this low cost.

There are plenty of things we disagree on. You don't need to argue with me when I agree with you.
Well, I should have phrased my disagreement more clearly, but the USPS isn’t subsidizing anyone. The fact that delivery costs may vary but the price structure doesn’t is not a subsidy.

So in my post should have said that neither Amazon nor rural customers are being subsidized. Conversely, as a city dweller in densely populated place, I am not being overcharged for mail services either.
  #70  
Old 04-27-2020, 07:59 PM
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Well, I should have phrased my disagreement more clearly, but the USPS isn’t subsidizing anyone. The fact that delivery costs may vary but the price structure doesn’t is not a subsidy.

So in my post should have said that neither Amazon nor rural customers are being subsidized. Conversely, as a city dweller in densely populated place, I am not being overcharged for mail services either.
Your profile says that you live in Washington, D.C. Let's say that one mail truck can deliver and then pick up X amount of mail in Y amount of time. Pretty quick compared to rural WV because in D.C. there is a bunch of mail right there in close confines.

In rural WV, one mail truck can pick up and deliver X amount of mail in Y+Z amount of time. That extra time is extra man hours, and extra gasoline and mileage and wear and tear on the postal vehicle.

Yet we are both charged the same amount of money for our mail sending and delivery. If you send a business letter to a company across town, you are charged the same price as me sending a business letter over that fifth yonder hill up the side of a mountain.

In a fair world, you should pay less for mail than me, but the government mandates that not happen. As such, you are subsidizing my mail, with the USPS as the conduit.
  #71  
Old 04-27-2020, 08:28 PM
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Nope. Being charged equal prices for the same service is by definition not a subsidy, even if the “true cost” of the service may vary a bit between customers.

I mean, the idea that the cost to mail a letter should vary depending on where it is sent from, sent to, and the precise method used to transport it, whether the truck driver was unionized or non-unionized, etc. is pretty outlandish.

And again, I’m saying this as someone who, in your estimation, is getting the short end of the stick. I’m not subsidizing your mail, period.
  #72  
Old 04-27-2020, 10:15 PM
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Nope. Being charged equal prices for the same service is by definition not a subsidy, even if the “true cost” of the service may vary a bit between customers.

I mean, the idea that the cost to mail a letter should vary depending on where it is sent from, sent to, and the precise method used to transport it, whether the truck driver was unionized or non-unionized, etc. is pretty outlandish.

And again, I’m saying this as someone who, in your estimation, is getting the short end of the stick. I’m not subsidizing your mail, period.
But that makes no sense. If I am UltraVires Inc., mail delivery company, and you want me to deliver a letter across town, that's gonna be a different price than delivery four states away and up a mountain.

The only reason it isn't in the USPS is because of a Federal law. And that is a transfer of money from the town guy to the mountain guy.

I must have misunderstood you somehow. All companies (except USPS) charge differently based on distance and charge. Try UHaul.
  #73  
Old 04-27-2020, 11:38 PM
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In a fair world, you should pay less for mail than me, but the government mandates that not happen. As such, you are subsidizing my mail, with the USPS as the conduit.
"...the government mandates that not happen." That's better worded as, "The Postal Service is legally obligated to serve all Americans, regardless of geography, at uniform price and quality." (cite). Government mandates and obligates many things but such enactments are usually called "laws". I am mandated not to shoot loathsome neighbors. Damn laws...

Back to subsidies. Prosperous (blue) states generate more revenue than they receive in federal paybacks; poor (red) states are just the opposite. Blue states subsidize red states. In your fair world, federal taxes should be raised in red states. And US senators are paid the same no matter how many state residents they represent. Wyoming's senators should thus be paid 1/3 as much as California's in your fair world.

Nobody pays for the rough dirt right-of-way at the edge of our property but our fuel taxes maintain roads we'll never use so we subsidize commuters and joyriders. Let's scrap that, GPS-track vehicle use, and charge tolls by mileage driven. It's only fair.

"Historically, the vast majority of subsidies in the United States have gone towards four industries: agriculture, financial institutions, oil companies, and utilities companies." (cite) In your fair world these losers should be left to collapse but they're usually politically connected and too big fail. US taxpayers subsidize incompetent managements. That's not surprising in a nation that installs vote-losers.
  #74  
Old 04-28-2020, 10:59 AM
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But that makes no sense.
Sorry, but it's your claim that makes no sense. Any business with fixed prices - from a fast food chain to a supermarket to a clothing store to an electric utility to a bookstore to an insurer covering a prescription - will have some transactions that cost less than other transactions. To say that the people whose transactions cost less subsidize those who cost more is a mockery of the word "subsidize." All businesses understand that the actual costs of any individual transaction are not calculable in real time and that assigning a fixed cost is necessary to average out the variables. My having my credit card ready gets me through the door faster than someone who decides to count out exact change but there is no sense in which that means I am subsidizing the person using change; there may have been a hundred variables before reaching the checkout that would have changed the cost calculation. Even if I somehow cost "less" that time I may wind up costing "more" the next time. Does that mean I am subsidizing myself?

You are using "subsidize" in a way different from all normal English discourse and all normal economic jargon. The flow of costs and revenues is an important field of economics but trivializing and making terms meaningless doesn't help understanding.
  #75  
Old 04-28-2020, 12:12 PM
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Nope. Being charged equal prices for the same service is by definition not a subsidy, even if the “true cost” of the service may vary a bit between customers.
It is a common notion in business that one portion of a business can be considered to "subsidize" a different portion of a business. For example, this is a quote from an accounting site:
"By failing to assign costs to all of the activities, touring bicycles were subsidizing mountain bicycles. Many companies have found themselves in similar situations. Activity-based costing has revealed that low-volume, specialized products have been the cause of greater costs than managers had realized."


Quote:
I mean, the idea that the cost to mail a letter should vary depending on where it is sent from, sent to, and the precise method used to transport it, whether the truck driver was unionized or non-unionized, etc. is pretty outlandish.
You do realize that this is exactly how UPS, FedEx and most carriers price their services, using from, to, service level, attributes of the items being shipped etc.
  #76  
Old 04-28-2020, 12:23 PM
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In some cases if the mailman cannot easily get to your mailbox they won't deliver your mail. Not sure if the USPS rules allow that but it happened to me a few times. Neighbor put trash cans right near my mail box and I asked and I was told that was the reason I got skipped.
  #77  
Old 04-28-2020, 12:23 PM
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All businesses understand that the actual costs of any individual transaction are not calculable in real time and that assigning a fixed cost is necessary to average out the variables.
It's a continuum, the level of effort to assign individual costs is proportional to the value of assigning those individual costs. The groupings get smaller as the return on tracking the smaller groupings increases.

For UPS and FedEx, they go down to the combination of: from+to zone, service level, package weight, package dimensions, etc.

At the extreme end of the continuum is something like consulting in which the costs are typically tracked (e.g. hours) for each transaction.


Quote:
You are using "subsidize" in a way different from all normal English discourse and all normal economic jargon. The flow of costs and revenues is an important field of economics but trivializing and making terms meaningless doesn't help understanding.
I've heard the term used this way throughout my career.
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Old 04-28-2020, 01:46 PM
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I've heard the term used this way throughout my career.
I’ve heard “I could care less” throughout my career too. Doesn’t make it right.
  #79  
Old 04-28-2020, 02:49 PM
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I’ve heard “I could care less” throughout my career too. Doesn’t make it right.

https://smallbusiness.chron.com/prod...ion-81079.html
"What Is Product-Cost Cross-Subsidization?
As most consumers assume, typical product pricing relies on the basic rules of supply and demand. But you may sometimes pay more or less for a product because the company that produces it has implemented different, highly strategic pricing tactics. One of these tactics is called product-cost cross-subsidization."

https://www.accountingtools.com/arti...-subsidization
"Cross subsidization is the practice of funding one product with the profits generated by a different product."

http://www.businessdictionary.com/de...idization.html
"A strategy where support for a product comes from the profits generated by another product. This is usually done to attract customers to a newly introduced product by giving them a lower price. The low price is sustained by the earnings of another product sold by the same company."


https://editorialexpress.com/cgi-bin...3&paper_id=127
"This paper analyzes competitive cross-subsidization by multiproduct firms, stemming
from the heterogeneity of consumer shopping patterns"


https://www.kellogg.northwestern.edu...apers/1559.pdf
"We develop a theory of price discrimination in many-to-many matching markets in which
agents’ preferences are vertically and horizontally differentiated. The optimal plans induce negative assortative matching at the margin: agents with a low value for interacting with other agents
are included in the matching sets of only those agents from the opposite side whose value for
matching is sufficiently high (cross-subsidization)."



Here's some definition stuff about subsidize:
"to give money to a person or an organization in order to pay part of the cost of something that they do or make"


Maybe you think a subsidy can only come from a govt:
"Although commonly extended from government, the term subsidy can relate to any type of support "
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Old 04-28-2020, 02:55 PM
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In the 70s my uncle worked for the USPS and he said they could hire temps for only 89 days . After that they had to hire full time or let the guy go. So they called the temps "89 day wonders." I have no idea if the 89 day limit is still the case.
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Old 04-28-2020, 03:35 PM
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Alright, RaftPeople, you’ve put together a well-sourced and solid argument that business units can subsidize each other.

My one question is... do customers subsidize one another?
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Old 04-28-2020, 04:04 PM
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I thought we were talking about users of one fixed price product subsidizing other users of that same fixed price product. Which can't be cross-subsidization.
  #83  
Old 04-28-2020, 04:56 PM
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Alright, RaftPeople, you’ve put together a well-sourced and solid argument that business units can subsidize each other.

My one question is... do customers subsidize one another?
Here are the various angles:
1 - The dollars provided by one group of customer's can be used by the business to subsidize a different group of customers
2 - The business is the entity that sets up the subsidization structure and mechanism (the customers do not)
3 - The customer's activity is required to realize or instantiate the subsidization when the source is revenue

From the perspective of #2, the answer is absolutely no - the business created the mechanism, not the customer
From the perspective of #3, the answer is absolutely yes - the act of purchasing is what instantiates the subsidization


The answer to your question depends on the assumptions being made, both #2 and #3 are correct.
  #84  
Old 04-28-2020, 05:05 PM
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I thought we were talking about users of one fixed price product subsidizing other users of that same fixed price product. Which can't be cross-subsidization.
The pricing is what creates the subsidization.

If FedEx charged the same price for zone 1 deliveries as they do for zones 2 through 8, then you have this same situation.

Just because USPS already did that, doesn't mean the situation doesn't exist.
  #85  
Old 04-28-2020, 05:10 PM
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Is this a purely intellectual discussion or is someone seriously suggesting that postage prices (particularly for letters) vary according to location?
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Old 04-28-2020, 07:08 PM
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Is this a purely intellectual discussion or is someone seriously suggesting that postage prices (particularly for letters) vary according to location?
They do for UPS and FedEx.

They don't for USPS.

This led to a poster making the point that for USPS, lower cost transactions are subsidizing higher cost transactions.
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Old 04-29-2020, 03:03 AM
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This led to a poster making the point that for USPS, lower cost transactions are subsidizing higher cost transactions.
Which led to my noting upthread that "The Postal Service is legally obligated to serve all Americans, regardless of geography, at uniform price and quality." USPS is a public service for "all Americans". Commercial deliverers serve their shareholders.
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Old 04-29-2020, 10:22 AM
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Which led to my noting upthread that "The Postal Service is legally obligated to serve all Americans, regardless of geography, at uniform price and quality." USPS is a public service for "all Americans". Commercial deliverers serve their shareholders.
No disagreement with any of that. The discussion wasn't so much about why they practice subsidization, it was more about whether their pricing could be considered subsidization between low cost transactions and high cost transactions.
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Old 04-29-2020, 12:46 PM
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No disagreement with any of that. The discussion wasn't so much about why they practice subsidization, it was more about whether their pricing could be considered subsidization between low cost transactions and high cost transactions.
Why does it cost less to mail from China to the USA than to mail from the USA to China?
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Old 04-29-2020, 01:23 PM
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Originally Posted by carnivorousplant View Post
Why does it cost less to mail from China to the USA than to mail from the USA to China?
for one thing that's a treaty they both signed. And there is way more mail coming to the US then going to China.
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Old 04-29-2020, 02:25 PM
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Quote:
Originally Posted by Bijou Drains View Post
for one thing that's a treaty they both signed. And there is way more mail coming to the US then going to China.
Yes, people buy something from China with a very small shipping charge. If they need to return it, the charge is much higher.
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Old 04-29-2020, 02:51 PM
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nm

Last edited by carnivorousplant; 04-29-2020 at 02:51 PM.
  #93  
Old 04-29-2020, 05:50 PM
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Quote:
Originally Posted by carnivorousplant View Post
Why does it cost less to mail from China to the USA than to mail from the USA to China?
I don't know why that is.
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